Elon Musk has been described as ingenious, unorthodox and eccentric. The bold things he has done in life have propelled him and his companies to where they are today. But are his antics now hurting his most prized accomplishment, Tesla?
Tesla shares are down more than 30% this year and the company just had a very disappointing quarter. Deliveries are down more than 8% year over year, the first quarterly decline in nearly four years. It’s also down 20% from the previous quarter.
Tesla even briefly lost its title as the world’s biggest EV maker to China’s BYD but reclaimed the position this week after BYD also announced disappointing numbers.
All the while, total EV sales are expected to grow this year. So what’s happening at Tesla?
Market intelligence firm Caliber says the prospective buyer pool for Tesla is considerably shrinking. The percentage of consumers who say they would consider buying a Tesla went from 70% in November 2021 to as low as 31% in February 2024.
“Elon Musk has become so polarizing that consumers are looking for other options than the best vehicle on the road because their values don’t align with Elon and they don’t want to support it,” said Ross Gerber, a longtime Tesla investor and CEO of Gerber Kawasaki Wealth and Investment Management. “It’s an unfortunate, unfortunate byproduct of the Twitter acquisition.”
Caliber’s survey found that 83% of Americans associate Tesla with Elon Musk, the highest CEO-to-company link in the country. The second highest association is Musk and X.
“We have the best software, the cars are performing amazing, they look great, they last forever, they’re cheaper than they’ve ever been, there’s a government discount to buy them,” Gerber said. “Why would you buy another car than a Tesla, essentially? And the reason is Elon.”
Tesla’s reasons for declining deliveries, however, included a fire at Tesla’s gigafactory near Berlin, shipping disruptions in the Red Sea and ramping up production on the new Model 3.
Gerber said Musk needs to pay more attention to Tesla to turn the tide. He said the CEO’s X posts and rare mentions of Tesla show that the company is not top of mind.
“I’d like to have Elon back as a full-time CEO of Tesla, but if he’s not willing to do it, it’s time for Tesla to move on,” he said. “It’s as simple as that.”