Elon Musk's role in the Trump administration complicates his business venture. The tech billionaires are moving forward with efforts to cut the federal government and budget in the face of increasing criticism.
Tesla's stocks have plummeted more than 50% since the end of last year, but demonstrations have emerged at outlets of electric car companies across the country in protest of President Trump's so-called government efficiency (DOGE).
Musk has also faced backlash, particularly in Europe, due to his criticism of the Ukrainian government and support for far-right parties on the continent.
Tesla's CEO confirmed Monday that he runs a variety of businesses while juggling Doge's work, calling the backlash a “tough setting.”
Investors are taking notes while critics are unhappy with his company as he spends more time in Washington with his focus on Doge.
“Doge's efforts have led Tesla to be entangled with the political fires of brewing,” Wedbush Securities Analysts wrote in an investor's note on Tuesday.
“We believe this is a 'moment of truth' for Musk and Tesla… If masks continue to head towards a 110% doge pass and don't pay attention to Tesla during this chaotic time, the damage to the brand will be wider,” the memo continued.
Criticism of Doge for massive layoffs and reduced spending has become the target of several of the same group where Musk's electric vehicles once propelled the environment.
“Mask is synonymous with Tesla and Tesla is synonymous with Mask,” Wedbush Securities analyst Dan Ives told Hill, adding, “The brand issues are even more worrying.”
Tesla shares fell 15% on Monday, the company's shares at its lowest since October and the largest decline since September 2020. Write to x “It will work out in the long run.”
Trump doubled his support for masks on Tuesday, and “issuing a statement” by buying Tesla outside the White House along with the tech billionaire.
“No. 1, I'm going to buy it because it's a great product. As good as it gets. Second for this guy [Elon Musk] Trump told reporters as he stood next to various Tesla models.
In recent weeks, protesters have targeted various Tesla showrooms and destroyed company vehicles on the streets. Meanwhile, some Tesla owners have placed bumper stickers on their vehicles using messages such as “I bought it before Elon got hooked.”
Protesters in Colorado Arrested Last month, the Molotov cocktail was lit up by spray-pakiing “Nazi” under the Tesla sign, and ignited the Molotov cocktail.
Trump said he would be open to labeling violence against Tesla dealers as domestic terrorism.
He argued online that the “radical left madman” is “trying to boycott Tesla illegally and republically.” Boycotting businesses is not illegal, and the court ruled that lawsuits often fall under the protection of the first amendment.
Anger over masks has spread across the border, particularly in Germany, with Tesla's sales falling 76% last month. It came after Musk's support for an alternative to Germany's (AFD) far-right parties.
Sales also fell by substantial margins in Italy, Portugal, Norway and Denmark. Reuters reported.
Ives called this moment the “twitter point” in Tesla's performance. If Musk spent more time on electric car companies, he predicted that the slump would become “just a mini-nightmare for investors.”
However, if Musk continues to focus on Doge at the expense of other companies, Ives suggested there could be “nearly epic damage that cannot be repaired.”
Musk's leadership at Tesla, along with his aerospace companies SpaceX and social media platform X, is known to be violently offensive at times. He claimed he was sleeping on the floor of a Tesla factory to maximize his work.
Now some of that strength is moving towards work at the White House and Doge. Wired reported In January he sleeps in Doge's office at the Executive Building in Eisenhower.
When asked by Fox Business Network host Larry Kudlow how he runs other businesses while supporting the president, Musk said it was “very difficult,” and then he paused and sighed.
Until the past year, Musk was a dominant force in the tech industry, but was largely away from politics. Now, investors are weighing his new dual role.
“One thing I'm sure is that there's no mix of politics and products sold,” says Ross Gerber, co-founder and CEO of Gerber Kawaski Wealth and Investment Management and longtime Tesla Investor. He told Yahoo Finance Last month, when I was asked about the job of a masked dog.
“The truth is that people identify with their cars and people don't want to identify with Elon Musk,” Gerber said.
Gerber, who called Tesla “a great company,” suggested that new leadership was needed.
Michael Kornfield, a political scientist and senior fellow at George Washington University, said he would not be surprised if a group of shareholders proposed a resolution seeking clarity and called for Musk to remove himself as Tesla's public face.
Musk's reduction in authority is noteworthy given his history of enormous involvement with the company.
“[Tesla’s] Now I got my nickname: “swasticar.” I think people are worried that Elon Musk's unprecedented integration of power will not buy more Teslas,” Cornfield said. “It was the first political response, and the second is the market response.”
Tesla did not immediately respond to Hill's request for comment.
Other analysts say it's too early to see the long-term impact between Musk's political involvement and Tesla's performance.
“I think it's certainly fair to say that Elon Musk's political activities are at a high risk of moving consumers away from Tesla, and that didn't exist before,” Morningstar analyst Seth Goldstein told Hill. “There's also a growing competition, and there's a true long-range EV competition at Tesla's price range.”
Consumers usually look to other factors such as the lifestyle, durability and longevity of the item, Goldstein said, but “that doesn't mean that cars are immune from political opinions.”
Tesla is a very high growth stock, Goldstein added. So stock prices usually respond to how the market feels about the company's growth outlook.
“Some of the growth seems to be slower than the market thinks,” Goldstein said. “We've seen stocks go above 50%, so we hope that Tesla stocks will continue to be one of the more volatile stocks in the market.”
