#196 Tesla Tanks
No, Tesla has not announced plans to produce tanks, it’s Tesla sales that are tanking! The recent backlash against Elon Musk, Tesla’s CEO’s entanglement in U.S. politics is a stark reminder of how reputational risks can travel at the speed of light. The significant decline in Tesla’s global sales, particularly in Europe, can serve as a case study in the potential repercussions of such entanglements.
In Germany, Tesla experienced a dramatic 76% drop in sales in February 2025 compared to the same month in the previous year. This decline is especially notable given the overall 30.8% increase in electric vehicle (EV) sales in the country during that period. The downturn has been largely attributed to CEO Elon Musk’s public support for Germany’s far-right Alternative for Germany (AfD) party, which has alienated a significant portion of the German consumer base. And the negative trends don’t stop at Germany’s borders. Across 25 European countries, including the UK, Norway, and Switzerland, Tesla’s sales fell by 44% in February 2025 compared to the previous year. In Australia, the company saw a 71% reduction in sales, while in China, sales plummeted by nearly 50% in February 2025. In addition, existing owners of Tesla vehicles increasingly express embarrassment and even fear of criticism and vandalism. Consequently, in the U.S., Tesla trade-ins have reached record levels. According to data from Edmunds, Tesla vehicles from model year 2017 or newer accounted for 1.4% of all vehicles traded in until mid-March 2025, up from 0.4% the previous year. In Germany, fleet managers are reconsidering the inclusion of Tesla vehicles in their company fleets. A recent survey by Deutsche Automobil Treuhand (DAT) revealed that 35% of fleet managers are re-evaluating their decisions regarding Tesla cars due to Musk’s political activities. Additionally, 8% reported that employees with company cars have expressed a desire to return their Teslas. What was once a cool, technologically advanced car for drivers who shared common values, has become a liability due to its CEO’s ties with a political ideology. Elon Musk’s sin is arrogance – the kind that assumes that a great product will overcome bad press, that global consumers won’t care what happens in Washington, and that loyalty is built solely on innovation.
In today’s hyperconnected world, brands are judged not just by what they sell, but by what they signal. And when your CEO becomes the message, the market might just walk away.
March 29, 2025 @ 10:58 am
The Tesla case illustrates how tightly connected personal and corporate brands have become – and how strategic missteps in public communication can reflect globally.
Tesla’s strong positioning in the German market was long considered a strategic pillar, underscored by high media visibility and sales momentum. However, this positioning has become increasingly fragile as public sentiment shifts. A recent T-Online survey for example initially showed that over 90% of respondents would not buy a Tesla. Although the result was later invalidated due to inconsistencies in the voting process, the reputational damage was already done.
The episode highlights at least two key insights for me:
Firstly, brand perception is now highly volatile and platform-driven, especially when personal and corporate brands are fused.
And secondly, strategic communication must anticipate global ripple effects, as local markets are influenced by global discourse in real time.
For companies operating globally, this underlines the importance of aligning brand management with public-facing leadership behavior. Especially in emotionally charged industries like mobility, reputation management must be treated as a core strategic function, not just a PR task.
March 30, 2025 @ 1:45 pm
There is a reason many actors, singers and influencers do not give political statements: They know that politics is a very polarizing topic and by expressing their opinion, they might alienate half of their audience. While critics of this behavior say that people with a big reach should use their influence to create positive change, it is easy to see how wrong it can go when one is out of touch.
Even though Musk is running successful businesses, the views he has made public during the past years have alienated a strong portion of his customers. X has lost around 9% of monthly active users over the last two years (https://soax.com/research/twitter-active-users) and countries in Europe are looking for alternatives to Starlink after Musk threatened to cut off access for Ukraine (https://www.politico.eu/article/poland-is-ready-to-seek-starlink-alternatives-if-musk-proves-unreliable/).
Musk’s reaction to this last statement was “There is no substitute for Starlink”. This might indicate why Musk has felt comfortable expressing his political views. It seems like there is a certain sense of invulnerability and that his products are too good to be boycotted. However, he picked the wrong voters group to alienate, especially since Tesla’s progressive, eco-friendly image appeals to liberals, the very group he is alienating.
March 30, 2025 @ 2:40 pm
I think it is important to separate the founder, Elon Musk, from the products of Tesla. Tesla, supported by over 100,000 employees worldwide, is a technology company that does more than just sell cars. However, Musk is controversial, especially in political matters. Nevertheless, Tesla’s cars are excellent, with superior autopilot and multimedia systems compared to competitors like VW. The instant torque of some models adds to the driving pleasure.
On the other hand, his lack of emotional intelligence (EQ) and leadership skills makes him unsuitable for politics. Even if it was Donald Trump’s idea to reduce government spending by laying off a large number of employees to find someone with experience in efficiency, as in the case of x.com, Musk’s approach shows little EQ. His support for the AFD, as mentioned earlier, is also one of the most recent examples of his provocative behavior and has led to backlash. The recent decline in Tesla’s European sales and share price also reflects the impact of Musk’s actions. This highlights the challenges of internationalization and market forces, with the decline in sales in Europe, which ironically can be seen as payback for Tesla’s aggressive expansion near Berlin, in the heart of the automotive industry.