Elon Musk turned democrats off Tesla when he needed them most

Some investors are pining for the old Tesla-obsessed Elon, worried he has been distracted with his political posturing and commitments at his other companies. (Photo by Jordan Strauss/Invision/AP file) (Jordan Strauss/Invision/AP)
Some investors are pining for the old Tesla-obsessed Elon, worried he has been distracted with his political posturing and commitments at his other companies. (Photo by Jordan Strauss/Invision/AP file) (Jordan Strauss/Invision/AP)

Summary

Some potential Tesla buyers couldn’t stomach a purchase amid the CEO’s fall outbursts, data suggest.

For years, the biggest cohort of Tesla buyers, politically speaking, has been Democrats. But when Elon Musk took a hard turn last fall, they didn’t follow him.

The proportion of Democrats buying Tesla vehicles fell by more than 60%, according to car buyers surveyed in October and November by researcher Strategic Vision.

Tesla has since made up ground with blue buyers, the research shows. But the dramatic drop highlights the risk hanging over Tesla with an increasingly political chief executive, at a time when electric-car makers are already struggling to appeal to many Republican buyers.

The fall contraction coincided with Musk’s being increasingly vocal about illegal immigration, amplifying a tweet promoting antisemitic vitriol and publicly attacking Disney over his contention that the entertainment company had become too woke. (Musk has called the troublesome tweet foolish, and the Mouse House CEO has defended its positions while saying it needs to stay focused on entertainment.)

In many ways, Musk was sounding a lot like Donald Trump, embracing billionaire populism, and less like the green hero he was once celebrated as.

Those controversies, it seems, have put the electric-vehicle maker in an even tougher position this year as the overall market for EVs has slowed. It doesn’t help EV makers that U.S. politics has polarized the technology, which some Republicans have denigrated in their campaigns.

Globally, Tesla sales fell in the first quarter, the first year-over-year drop since the troubled early days of the pandemic in 2020. Musk this past week rolled out widespread layoffs, and shares have fallen 41% this year through Friday as investors worry Tesla’s dramatic growth story is in trouble.

Some investors are pining for the old Tesla-obsessed Elon, worried he has been distracted with his political posturing and commitments at his other companies, including an artificial-intelligence startup called xAI and social-media platform X.

Other surveys have captured a pullback in consumers’ consideration of Tesla vehicles since Musk acquired the social-media platform in late 2022 and held court on contentious social issues.

But the mix of Democrats, who have been core constituents for the Tesla brand, had remained mostly steady—until last fall.

Among 2022 model-year buyers, Democrats made up 40% of Tesla customers and 39% in 2023, according to Strategic Vision’s surveys. Things began to change in the 2024 model year survey, which began in October. The makeup of Democrats fell to 15% while Republicans jumped to 32% and independents swelled to 44%.

Those results show Tesla was losing sales among Democrats, Alexander Edwards, president of Strategic Vision, said of the fall findings.

In California, a solid-blue state, registrations of new Tesla vehicles fell almost 10% in the fourth quarter. That was a stunning reversal from the third quarter when registrations rose 43%, and perhaps a sign of things to come nationally.

Tesla doesn’t release U.S.-specific sales results. But Motor Intelligence estimates Tesla’s U.S. sales growth turned negative this year. Model 3 sedan sales fell 44% in the period that ended in March compared with a year ago, according to the research firm. Model Y sport-utility vehicles rose just 1.4%.

EV ownership has long been politically divisive.

Early electric cars, with dramatically higher prices than comparable gas-powered ones, were cast by critics as playthings for the rich and coastal elites. For every five Democrats owning an EV, there have been two Republicans, according to Strategic Vision’s survey last year.

Those differences were further highlighted in the past year amid a contentious Republican primary season where candidates took aim at President Biden, the presumptive Democratic nominee seeking a second term, and his work to support development and adoption of EVs in the U.S.

Former President Trump, the presumptive Republican nominee for the White House, has made attacks on electric cars a regular talking point during his campaign, even as he and Musk appear to have a bromance in the works ahead of November.

Trump has conceded the two men have a schism on one topic. “We obviously have opposing views on a minor subject called electric cars," Trump said during a CNBC interview last month. “I’m all for electric cars, but you have to have all of the alternatives."

Musk has said he is against Biden but has stopped short of saying he will back Trump. “There is either a red wave this November or America is doomed," Musk tweeted in March.

As for how his comments might affect his businesses, Musk has essentially shrugged off the suggestion that they could affect things.

“With respect to Tesla, we make the best cars—whether you hate me, like me or are indifferent," Musk said in November. “Do you want the best car, or do you not want the best car?"

And he might be right—if he can just keep from rocking the boat too much.

While Democrats’ ranks fell at the end of the year, some came back in subsequent surveys by Strategic Vision, rising to 35% of the mix of buyers through late February—still not what they traditionally had been, but better than last fall when their share was weakening.

“Elon hasn’t been in the press as much as he has previously," Strategic Vision’s Edwards said. “This lack of negative press and antics, combined with EV [shoppers] today…shopping various EVs and they find that the Model 3 and Y are still, in their opinion, the best decision based on value."

Write to Tim Higgins at tim.higgins@wsj.com

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