Car buyers snub Tesla as Elon Musk’s reputation dips

Tesla is no longer viewed in the same light as it was earlier, in part due to CEO Elon Musk’s polarising persona. This has also affected the ranks of would-be Tesla buyers in the US, according to a survey by market intelligence firm Caliber. The electric-vehicle maker is expected to report weak quarterly sales despite continuing to post strong sales growth last year buoyed by aggressive price cuts in China.

Caliber’s “consideration score” for Tesla fell to 31% in February, less than half its high of 70% in November 2021 when it started tracking consumer interest in the brand. From January alone, Tesla’s consideration score fell 8 percentage points even as Caliber’s scores for Mercedes, BMW and Audi, which produce combustion as well as EV models, inched up during that same period, reaching 44-47%.

Earlier, Musk has blamed high-interest rates for curbing consumer demand for big ticket items like cars. The market intelligence firm has suggested strong associations between Tesla’s reputation and that of Musk for the scores. As per the survey, 83% of Americans connect Musk with Tesla. “It’s very likely that Musk himself is contributing to the reputational downfall (of Tesla),” Caliber CEO Shahar Silbershatz told Reuters.

Musk’s increasing right-wing politics and public statements are weighing on Tesla’s brand and demand, Reuters noted based on its conversations with marketing, polling and car experts. “It is hard enough to win sales without getting into politics,” said Tim Calkins, a marketing professor at Northwestern University’s Kellogg School of Management.

Tesla has been facing immense pressure in China due to economic fears, the lack of affordable new models and rising competition from cheaper rivals like BYD, as per Wall Street analysts. Additionally, the overall electric vehicle sales in the US are forecast to increase 15% in the first quarter of this year, according to estimates by researcher Cox Automotive. Tesla sales are projected to increase by 3%. “The EV slowdown is shaping up to be a Tesla slowdown,” Cox analyst Stephanie Valdez Streaty said during a conference call.

Further, at least five analysts have cut Tesla’s target price last month stating that there is a possibility that the automaker could post disappointing first-quarter delivery results. Following this, Tesla shares are down nearly 30% year to date.