Elon Musk’s support for former President Donald Trump has not gone down well with potential Tesla investors.TSLA) customers.
According to the latest data from analytics firm Civic Science, Tesla’s favorability rating among Democrats has fallen from 39% in January to 16% as of July 16. Among Republicans, its favorability rating has fallen from 36% to 23% over the same period.
“The data consistently shows that Democrats associate Elon Musk and his actions more closely with the brand than Republicans do,” CivicScience CEO John Dick told Yahoo Finance.
And that could spell trouble for the brand’s business: Tesla short seller Mark Spiegel told Yahoo Finance that a potential boycott by Democrats would be “terrible” for the electric vehicle maker.
“He’s completely alienated most of his demographic, which will destroy his business,” Spiegel warned. “There is no Democrat, very few, willing to buy a Tesla at this point.”
Longtime Tesla investor Ross Gerber of investment firm Gerber Kawasaki told Yahoo Finance that he is considering selling his Tesla vehicles because Musk’s endorsement “doesn’t align with my values.”
“Elon’s final stand puts me in a very difficult moral position,” Garber said. “I drive a Cybertruck, and now it’s kind of a MAGA truck.”
The number of Tesla owners who identify as Democrats has fallen to 26% from 39% last year, according to research firm Strategic Vision, with the data showing a dramatic drop in November. Musk made anti-Semitic remarks on X It has been steadily declining since then.
Backlash from Democrats isn’t the only thing that could pose a problem for Tesla going forward: Threats from former President Donald Trump and his running mate, Senator J.D. Vance, to end government subsidies could also be a blow to the EV leader, experts told Yahoo Finance.
“When the $7,500 tax credit goes away, Tesla will be forced to raise prices. And when prices have to be raised, car sales will fall,” Spiegel added.
Guggenheim’s Ron Jusikow told Yahoo Finance that the current $7,500 federal EV tax credit is a “key tool to keep purchase prices down” for the company and eliminating it would be a “negative.”
The uncertainty surrounding the EV tax credit is nothing new for Tesla or traditional automakers: Brian Sponheimer, a portfolio manager at Gabelli Asset Management, told Yahoo Finance that the issue “has been a political hot potato for quite some time,” urging investors to be cautious and “take a wait-and-see approach.”
But in his speech at the Republican National Convention, Trump did not underestimate his position, telling the crowd, “I will end the electric vehicle mandate on day one. It will save the American auto industry from total destruction and save American consumers thousands of dollars per car.”
“If Elon thinks that paying Trump $45 million a month is somehow going to stop him from repealing the EV tax credit, he’s 100% wrong,” Gerber said. “The first thing they’re going to target is the solar and EV tax credits. The government has a huge deficit, and it’s easy to eliminate them.”
But Musk isn’t worried about a potential setback for EV credits.
“End the subsidies,” he said. I have written “That will only help Tesla,” he said in a post by X.
Musk’s endorsement of Trump marks a shift from his previous supporters. In 2020, the billionaire said he voted for President Biden, and in 2016, he criticized Trump, who ran against Hillary Clinton, saying “he doesn’t seem to have the right character for America.”
About 30 minutes after the attempted assassination of President Trump at a rally in Pennsylvania on July 13, Musk announced his full support for the former president. In a post on X, Musk wrote, “I fully support President Trump and wish him a speedy recovery.”
Since then, Musk has used his X megaphone to denounce Democrats and stoke rumors about an assassination attempt among his 190 million followers.
Tesla did not respond to Yahoo Finance’s request for comment.
Yasmin Coram is a senior reporter at Yahoo Finance. Click the X to follow Yasmin. Yasmin Coram and LinkedInSend Yasmin your newsworthy tip: yasmin.khorram@yahooinc.com
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