Elon Musk’s politics have eroded Tesla’s appeal among some core buyers of electric vehicles. Some customers have started getting rid of their Teslas, and the company’s sales are down worldwide. Meanwhile, Musk is looking at new ways to expand Tesla’s business. WSJ’s Becky Peterson explains how Tesla’s fortunes are falling as Musk rises in Trump world. See the Journal live! Take our survey! Further Reading: -Tesla’s Fortunes Fall as Musk Rises in Trump World -Tesla Caps Roller-Coaster Year With Mixed Fourth-Quarter Earnings Further Listening: -Trump 2.0: The Musk-Trump Bromance -Inside USAID as Elon Musk and DOGE Ripped It Apart -Tesla's Multibillion-Dollar Pay Package for Elon Musk Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: Why are people protesting at Tesla showrooms?
On Saturday, scores of people converged on a Tesla showroom in Lower Manhattan. Some demonstrators went inside, while others locked arms to block the door. For a while, the showroom was shut down. Demonstrations like this broke out around the country this past week. In Colorado, one Tesla showroom was hit with Molotov cocktails. In Oregon, another location was riddled with bullets.
Seems like people are finding that Tesla stores, Tesla superchargers and Teslas they see in the street are illegal. good locations to protest what's happening in the federal government. That's our colleague Becky Peterson, who covers Tesla. So across the country, we've seen protests at Tesla sales locations. We've also seen arson at superchargers and people spray-painting graffiti on random cars.
This blowback against Tesla is coming as the company's CEO, Elon Musk, has risen in the new Trump administration. And people aren't just using signs and slogans to show their disapproval. They're protesting with their wallets.
Chapter 2: How have Elon Musk's politics affected Tesla's image?
People see Tesla as a way to directly respond to what's happening in the government. Musk wasn't elected. There's not a lot of ways to hit back directly. So there's sort of a movement to try to get at him financially. Tesla's sales are declining for the first time. That's at a company that has only seen growth for the last decade.
Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Tuesday, March 11th. Coming up on the show, are Elon Musk's politics getting in the way of Tesla's business?
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When Elon Musk founded Tesla, he had a mission to help stop climate change by making electric vehicles cool. Here's Musk at one of Tesla's annual meetings.
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Chapter 3: Who are Tesla's primary customers and how are they responding?
What are the things that need to be done in order to transition to a fully sustainable global economy? Which I think, you know, the sooner we do that, the better for the planet.
Tesla's mission is to accelerate the world's transition to sustainable energy. So Tesla had a stellar reputation as being sort of this luxury car. It has electric battery. It doesn't use gasoline. So a lot of buyers saw it as a way to address climate change head on. And who have been Tesla's primary customers? What sorts of people were buying these cars?
It really took off among buyers in California. The Democratic state had a lot of success in areas like San Francisco and Los Angeles. where people are dependent on cars but are also more conscious about climate change and driving's impact on the environment. And so Teslas were seen as this sort of high-tech answer to climate change.
It's kind of hard to overstate how popular it is among Californians and in other areas like that.
Tesla's took off. By 2020, the company had become the world's most valuable carmaker. Soon after, Musk became the world's richest person. And he was known as someone who had big ideas and wanted to change the world.
Musk has always been an outspoken figure. He mostly, in the early days, stuck to making big claims about spaceflight and sort of painting this vision of a future where Everyone's driving EVs. He's going to take us to Mars. He was making bold claims, but they mostly were focused on the future of technology.
Then in 2022, Musk made a major decision. He bought Twitter and renamed it X. And his big, bold statements started to include more than just his takes on business and tech.
He started posting a lot more about politics and getting involved in sort of like the global order of things. He has expressed opinions on everything.
By the time the 2024 presidential campaign was in full swing, Musk had become a major political presence on the right. He began donating to then-candidate Donald Trump, ultimately giving the campaign around $288 million. Musk also started appearing at Trump rallies.
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Chapter 4: What changes did Musk's political involvement cause?
At his first one, he wore a MAGA hat and bounded onto the stage.
Hi, everyone.
After Trump was elected, Musk was appointed the head of the Department of Government Efficiency, or DOGE, and he's frequently been at the president's side. To some customers who'd bought into the original vision of Tesla as an eco-friendly, save-the-world kind of company, Musk's turn has been disillusioning.
We're seeing all across the country, and I've even heard stories about it happening in Europe, people buying bumper stickers or magnets to put on their cars to distance themselves from Musk's politics.
Bumper stickers that say things like, I bought this before we knew Elon was crazy, and this Tesla does not endorse Elon Musk. Some people are even getting rid of their Teslas.
I want to get away from Elon Musk, everything Elon Musk, what he stands for. I decided I don't want to drive a Muskmobile, is what I've been calling this car. I love the car. I don't like driving something that supports Elon Musk, so we're getting rid of it.
Last year, Tesla sales fell 7% in the U.S. and continued to fall into 2025, according to automotive industry analysts. The company has felt the pain internationally, too, as Musk has shown support for a far-eyed party in Germany. Musk has also waded into international politics. How has that sort of shown itself in terms of foreign buyers?
You know, in areas like Germany, it's pretty clear. So sales in Germany in February were down 76 percent compared to February last year. And in France, they were down 26 percent compared to February of last year. But that's after having another huge drop in January.
And what's at stake for Tesla here?
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Chapter 5: How have Tesla's sales and market share been impacted?
Yesterday, Musk acknowledged in an interview with Fox News that his work with the government is taking a toll.
How are you running your other businesses? With great difficulty.
Later, Trump posted on social media that he would buy a Tesla as a show of support for Musk. As Tesla struggles, Wall Street has questioned why he hasn't been around enough to fix things. So what is Musk doing with Tesla? That's after the break.
While it seems Musk hasn't been spending a lot of time getting Tesla out of its sales slump, Becky says he's focused on steering the company in a different direction. For instance, Tesla was set to release what the company called its low-cost car last year. It was supposed to sell for $25,000, giving the company a chance to dramatically increase the number of EVs and Teslas on the road.
But Musk pulled the plug on that model.
Tesla is in the process of moving from a revenue model that's almost entirely based on selling cars to one where Tesla is an AI and robotics company.
These days, Musk sees the future of Tesla as largely in self-driving cars. To make this happen, the company is working on an AI-assisted software that it says will one day fully operate a car.
I think that the big... shift that Musk has suggested is that Tesla could become more like a software company. So right now it sells cars which are low margin. They're expensive to make. There's limitations on how much people are willing to spend. And it's just a lot of work to build a car.
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Chapter 6: Is the competition affecting Tesla's market position?
This software is called Full Self-Driving Supervised, or FSD Supervised. The software is already available, and Tesla owners can use it in a limited capacity. But Musk wants to make the cars fully autonomous.
Software revenue is just a lot more valuable. So right now, if you own a Tesla and you want to subscribe to FSD Supervised, the hardware is already on the car. And then you pay $99 a month to subscribe to this service. And I think Musk envisions a future where you pay $99 a month to subscribe indefinitely.
There's also plans for Tesla to roll out robo taxis, which is more in line with what Waymo is doing. So in that case, Tesla would own a fleet of vehicles that people could use as a ride hailing service around the country. Right now, the plans, though, are limited in scope. Tesla said it's going to roll out that service in Austin in June.
And we know it's also applied for some early permits that would allow it to eventually roll out something similar in California. So Musk really has this vision of a future where all cars are autonomous. So in his brain and in the brain of Tesla's most bullish investors, they can potentially convert every single possible driver in the world to being a Tesla FSD subscriber.
Chapter 7: How have political dynamics shifted Tesla's customer base?
Tesla investors are used to betting on Musk's vision well before the products exist. That's where they see a lot of value in his companies. And Musk is moving forward on these ideas. He's poured money into a new kind of self-driving car he calls the CyberCab. Tesla unveiled the model in October at a private event on a film lot in Los Angeles.
We got the first view of the CyberCab. It's this tiny little two-seater car. and sort of gave a vision of what it would look like if, you know, a city was full of autonomous vehicles.
50 robo-taxis carried guests around movie sets that looked like city streets. And from a stage, Musk addressed the crowd.
All driverless. You'll be able to take a ride in the cyber cab. There's no steering wheel or pedals. So I hope this goes well.
Tesla says it'll start producing the CyberCab in 2026. But getting those autonomous cars on the road involves clearing regulatory hurdles.
Right now, autonomous vehicle regulations are done on a state-by-state basis, which is something that Elon and his executives are eager to change.
Here he is on a Tesla earnings call in October.
Some things in the U.S. are state-by-state regulated, like, for example, insurance. Like a It's incredibly painful to do it state by state, 50 states.
Musk wants the system to be centralized under a single federal rule. And he wants it sooner rather than later.
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