“You think it’s helping, but it’s actually hurting.”
On Tuesday, president Donald Trump appeared in front of the White House as part of a bizarre sales pitch for Elon Musk’s embattled carmaker Tesla.
During the highly unusual event, Trump announced that he had bought a Tesla while gushing over a red Model S.
The endorsement was a staggering display of Trump and Musk’s unusual bond. To call it a conflict of interest would be an astronomical understatement, with senator Chris Murphy (D-CN) accusing them of rampant corruption.
“Just because the corruption plays out in public doesn’t mean it’s not corruption,” he tweeted.
But as experts have since pointed out, the president’s desperate attempt to drum up excitement for a company that’s facing a cataclysmic financial year could easily end up backfiring.
As the Associated Press reports, the already tarnished brand’s reputation could be even further undermined by an even closer association with Trump and his toxic brand of politics.
Musk’s gutting of the government with the help of his so-called Department of Government Efficiency, in addition to his endorsement of extreme right-wing ideologies, has already triggered protests and vandalism at dealerships across the company.
“Tesla is becoming a political symbol of Trump and DOGE, and that is a bad thing for the brand,” Wedbush Securities financial analyst Dan Ives, one of Tesla’s biggest backers, told the AP. “You think it’s helping, but it’s actually hurting.”
Earlier this week, Tesla’s stock was put through the wringer, plunging a whopping 15 percent in a single day. While it’s since recovered somewhat, the company’s shares are still down over 33 percent year to date, and lower than they were when Trump won reelection last November.
And sales figures paint an extremely troubling picture of what’s still ahead, with monthly sales dropping off a cliff in Europe, Australia, and even China. Sales are also starting to dip in the US.
Investors are fuming, and calling for Musk to stop ignoring Tesla’s woes.
“It’s become clear he’s now spending more time on DOGE than anything else,” CFRA Research senior equity analyst Garrett Nelson told Business Insider.
Instead of blaming Musk for his abysmal behavior and abandoning his EV business, Trump pointed the finger at so-called “Radical Left Lunatics” in a ranting post on his social media platform Truth Social on Tuesday, arguing that their boycott of the brand was “illegal.”
But whether Trump’s embrace of his buddy Musk’s ailing car company will have the desired effect and conjure some much-needed optimism remains to be seen.
As the AP points out, workers likely won’t be incentivized by stock offers thanks to the company’s plummeting shares. The company could also struggle to raise new money for expansion, since falling sales could negate any need for it.
Tesla isn’t the only fire Musk has been trying to put out. His social media platform X was taken down by what Musk claimed to be a “massive” cyberattack earlier this week. His space venture SpaceX is also struggling to get its massive Starship rocket off the ground.
Now that he’s firmly cemented himself as Trump’s left hand man, the future of Tesla is as uncertain as ever. Will investors look past DOGE’s brutal cuts to government budgets and Trump’s global trade war, which has sent the stock market spiralling?
The carmaker’s share price recovered over seven percent on Wednesday, indicating at least some willingness to tap into the excitement surrounding Trump’s latest car purchase. Tesla bulls on Wall Street are adamant that the carmaker’s woes are only temporary.
But rising anti-Musk sentiment could leave far more permanent scars on the company’s brand and financial future.
“Elon is probably the most hated person in the world,” Gerber Kawasaki CEO and Tesla shareholder Ross Gerber told CNBC. “Most people around the world, you know, hate Elon. And the way they’re taking it out is on Tesla. And it’s a really unfortunate thing.”
More on Tesla: Trump Was Reading Notes for His Tesla Sales Pitch and a Photographer Got a Shot of Them
