Elon Musk, the CEO of Tesla, indicated earlier this week that he intends to step away from political activities and concentrate on the struggling electric vehicle brand. However, a prominent Tesla supporter suggested that the company’s reputation might be permanently tarnished both domestically and internationally, raising concerns that this could deter consumers from adopting environmentally friendly EVs.
During an earnings call on Tuesday, Musk reassured investors that his involvement with the controversial Department of Government Efficiency would significantly decrease starting in May. This decision follows a challenging first quarter for Tesla, which experienced the largest drop in quarterly sales in its history. In Q1, Tesla’s sales plummeted by 71% compared to the same period last year.
Dan Ives of Wedbush Securities, known for his bullish stance on Tesla stock, expressed unusually bearish views in a note to clients. According to CNN, Ives stated that Musk’s return would not be enough to repair the brand damage caused over the past few months. He attributed Tesla’s sales issues primarily to Musk’s involvement in U.S. politics and suggested that some of the damage would be permanent in Europe and the U.S.
Gordon Johnson of GLJ Research was even more pessimistic, asserting that the damage Musk has caused is entirely irreversible.
Despite Tesla’s declining market share, it still holds a significant portion of the EV market. Concerns persist that Tesla’s troubles could negatively affect the broader EV market, although global EV sales increased by 29% year-over-year in March, indicating continued demand.
While Tesla’s brand image remains volatile, the demand for EVs continues to grow, with used Tesla prices at an all-time low. Platforms like Recurrent connect buyers and sellers interested in EV transactions. Internationally, Chinese EV manufacturer BYD has seen a surge in sales, particularly in Australia, as Tesla’s dominance wanes.
— new from The Cool Down