Potential Tesla buyers steer clear as Musk's reputation plunges

Raindrops gather on the logo of a Tesla Model Y, Thursday, Dec. 15, 2022, in Charlotte, N.C. (AP Photo/Chris Carlson)
Raindrops gather on the logo of a Tesla Model Y, Thursday, Dec. 15, 2022, in Charlotte, N.C. (AP Photo/Chris Carlson) Copyright Chris Carlson/Copyright 2022 The AP. All rights reserved
By Indrabati Lahiri
Share this articleComments
Share this articleClose Button

Elon Musk's increasingly controversial reputation has led to a steep drop in the number of customers considering buying a Tesla.

ADVERTISEMENT

Possible US Tesla customers are now reconsidering buying the electric vehicle's products, according to Caliber, a market intelligence company. This is mostly due to owner Elon Musk's increasingly worsening reputation, fuelled by highly controversial statements, tweets and right-wing politics.

Caliber's Tesla "consideration score", obtained exclusively by Reuters, dropped to 31% in February 2024. This was a fall of 8% on January's score, as well as a steep plunge from November 2021's record high of 70%.

Conversely, the consideration scores for other high-end car makers, with both electric and gas options, such as BMW, Mercedes-Benz and Audi for February 2024 were all between 44% and 47%.

The reluctance to buy new Tesla cars has not been helped by the company recently increasing the price of Model Y cars by $1,000 (€927.47). The Tesla Model Y was Europe's best-selling car in 2023, with more than 250,000 registrations.

Tesla has been doggedly slashing prices in China, one of its key markets, for the past few months, in order to compete better with Chinese electric vehicle (EV) makers such as BYD. This helped the company to see robust sales last year.

However, Tesla is still expected to report declining first quarter 2024 sales in the coming few days, most likely due to a combination of clients' cutting back on spending, as well as lagging deliveries.

Tesla's deliveries, which touched about 422,875 in Q1 2023, are expected to be considerably less in Q1 2024. The company's share price also took a nosedive of about 30% in the first three months of this year, eroding about $40 billion (€37 billion) of Elon Musk's wealth.  

Could Musk's reputation be damaging Tesla

Over the past few months, Musk has been highly involved in controversies, especially surrounding social media platform X, formerly known as Twitter. Following Musk's acquisition of the platform, several problematic accounts previously banned by Twitter were reinstated.

These included former US President Donald Trump's and rapper Ye, formerly known as Kanye West's accounts.

This was despite Donald Trump having widely been accused of inciting the 6 January US Capitol attack through his tweets. Ye has also been repeatedly slammed for his overt support of Hitler and anti-semitic comments.

On the other hand, Musk has also banned many well-known journalists' accounts, such as CNN reporter Donie O'Sullivan and The New York Times reporter Ryan Mac, leading to accusations of blocking free speech.

Recently, Musk's $55.8 billion Tesla pay package was also declared void by a Delaware judge, who called it excessive and "unfathomable". This came after a shareholder sued Tesla, claiming that Musk was overcompensated. The ruling led to Musk losing his crown as the world's richest man and sliding down to second place, following Bernard Arnault, the CEO of luxury goods company LVMH.

Share this articleComments

You might also like