In a recent report, experts are sounding the alarm over the detrimental impact of Elon Musk’s behavior on Tesla’s reputation and sales. According to findings from corporate reputation management platform Caliber, Tesla’s standing has taken a hit, with potential buyers being put off by Musk’s controversial actions and statements.
The Caliber survey, as detailed by Reuters, indicates a significant decline in Tesla’s “consideration” and “trust and like” scores, dropping by eight per cent since January. Meanwhile, rival German automakers such as Mercedes, BMW, and Audi have seen improvements in these metrics over the same period, reaching 44-47%.
Shahar Silbershatz, CEO of Caliber, emphasized the impact of Musk’s conduct on Tesla’s reputation, stating, “It’s very likely that Musk himself is contributing to the reputational downfall.”
Elon Musk’s recent engagement with extreme right-wing ideologies and propagation of conspiracy theories has also fueled concerns. Tim Calkins, a marketing professor at Northwestern University, highlighted the challenge of blending politics with car sales, noting that it can deter potential customers.
“It is hard enough to win sales without getting into politics,” Northwestern University marketing professor Tim Calkins told the news agency.
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This decline in Tesla’s reputation arrives amid broader challenges for the company, including disappointing financial results and increased competition in the electric vehicle (EV) market.
Tesla’s shares experienced a significant drop earlier this year following an earnings report that fell short of expectations. Musk himself cautioned about potential lower growth in vehicle volume for 2024.
“Whether you hate me, like me or are indifferent, do you want the best car, or do you not want the best car?” he told audiences at an event in November.
Furthermore, new Tesla registrations in California fell for the first time since the pandemic, pointing to potential setbacks in one of the company’s key markets.
Despite Musk’s assertions that his personal views shouldn’t affect Tesla’s appeal, the data suggests otherwise. The current landscape offers numerous alternatives to Tesla, with consumers increasingly factoring in the CEO’s behavior when making purchasing decisions.
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Climate activist Kat Beyer, who purchased a Tesla Model Y, expressed conflicted sentiments: “It’s hard to drive the car associated with him, but I can’t go back to gas.”
Ed Kim, president of AutoPacific, noted a growing segment of EV shoppers moving away from Tesla due to concerns over Musk’s behaviour and political affiliations.
Jonny Page, a London-based consultant, cited both safety concerns and Musk’s behaviour as reasons for opting against Tesla for his next EV purchase.
Despite these challenges, Tesla retains strong loyalty among its customer base, with data from S&P Mobility indicating that 68% of Tesla owners choose another Tesla when buying a new car.
Christian Cook, a Tesla Model 3 owner in Texas, brushed off Musk’s actions, highlighting the allure of Tesla’s products irrespective of the CEO’s controversies.