The controversies surrounding Musk have opened doors for competitors in the electric vehicle market.
Elon Musk’s MAGA political stance is quickly becoming a significant problem for Tesla.
Last month, Tesla vehicle registrations plummeted across Europe amid a widespread boycott of the electric car brand. Although broader economic factors are at play, Musk’s involvement in the Trump administration and his explicit support for far-right politicians seem to be accelerating the loss of reputation for his company, offering rival brands an invaluable opportunity.
Transport authorities in Germany reported that registrations of new Tesla models in January fell by nearly 60% compared to the previous year, despite the country’s electric vehicle sector experiencing combined growth of 53.5% in sales during the same month.
Significant drops in registrations were also observed in Spain (75.4%), France (63.4%), Sweden (46%), and the Netherlands (42.5%). This decline has been linked to the behavior of Tesla’s CEO.
“There is no doubt that ‘the Musk factor’ has influenced Tesla sales, just as his reputation affected Twitter when he acquired it and renamed it X,” commented Andrew Fellows, an automotive industry expert at Star, a market intelligence firm, in an interview with TNW.
Musk, already a polarizing figure, has intensified his MAGA campaign in recent months, and the world’s richest man (along with the social media platform X, which he owns) has quickly become a spokesperson for Trump-era conservatism.
In Europe, Musk has openly supported the German populist party AfD and even granted an interview on the X program where he praised the party’s leader, Alice Weidel. During Trump’s inauguration on January 20, Musk made a controversial hand gesture that many interpreted as a Nazi salute.
Musk’s actions can be seen as despicable or brave, depending on who you ask. But for those who disapprove of his actions, Tesla (a brand difficult to separate from its leader) is an obvious target.
The backlash against Tesla
On January 23, political activists projected an image of Musk giving a Nazi salute along with the word “Heil” at Tesla’s gigafactory in Berlin.
At the end of January, after Musk participated in an AfD rally via video call, Poland’s Tourism Minister, Slawomir Nitras, called for a boycott of the electric vehicle brand. In early February, a Tesla showroom in the Netherlands was vandalized with swastikas and anti-fascist slogans.
It is not hard to argue that public sentiment against Musk is worsening, but it is more challenging to determine whether the entrepreneur’s actions are negatively affecting Tesla’s performance.
One of the best ways to assess this is to ask Tesla owners.
In the Netherlands, one in three Tesla drivers wants to get rid of their car because of Musk, according to a recent survey. One of them is Tim Kraaijvanger, founder of Tesla360.nl, a Dutch site dedicated exclusively to Tesla products. Ironically, Kraaijvanger recently sold his Tesla and bought a Polestar.
“I do not wish to be associated with [Musk’s] ideology,” he told Wired. “Although Musk may get away with giving a [Nazi-like] salute in some parts of the world, European markets reject that behavior.”
Musk’s actions could be beneficial for other electric vehicle manufacturers, as more people like Kraaijvanger are abandoning the brand. “It’s a fantastic opportunity for rival manufacturers,” says Fellows.
Among those willing to seize this opportunity is Polestar, the Swedish electric vehicle brand. Polestar CEO Michael Lohscheller mentioned that the company has seen an increase in inquiries from dissatisfied Tesla owners in recent months and is encouraging its sales team to reach out to them.
“Many people write to us saying they don’t like all this,” Lohscheller told Bloomberg News. “It’s important to listen carefully to what they say. And I can tell you that many people have very, very negative feelings.”
Some drivers, who are not yet ready to part with their Teslas, have started putting stickers on their cars with messages like: “I bought this car before Elon went crazy.” Even some Tesla employees want to distance themselves from their boss, according to the Washington Post.
To date, Tesla’s stock has fallen 15% in the last month.
“Tesla is developing a serious reputation problem,” says Fellows. The automotive industry expert believes that Musk and Trump share about 30% of the blame for the electric vehicle manufacturer’s sales decline. He attributes the remaining 70% to “industry factors.”
The blame game
The Tesla Model Y was the best-selling car in Europe in 2023, but intense competition has tested the brand’s market share. In 2024, Tesla sales fell by 1.1%, their first drop in over 10 years. In September, Chinese automaker BYD became the world’s leading electric vehicle brand thanks to its aggressive pricing strategy.
Although Tesla has made modest changes to its model lineup in recent years, rival brands like VW, Renault, and BMW have been launching new models, sometimes at lower prices.
Tesla has also had to face many of the same challenges as other electric vehicle manufacturers (slowing demand, supply chain disruptions, and reduced subsidies for first-time vehicle buyers). But the company also has some particular issues.
“Tesla was already facing several hurdles in 2025 before CEO Elon Musk found himself at the center of several controversies with the potential to affect the company’s sales volume and profitability,” commented Peter McNally, senior analyst at London-based research firm Third Bridge, in an interview with TNW.
Musk’s company has also been busy updating its Model Y, which according to McNally contributed to the sales decline, as customers wait for the latest model before upgrading. The revamped Model Y will go on sale in the United States next month.
Musk’s antics could not have come at a worse time for Tesla, as it faces intense competition, an aging model lineup, and a broader decline in electric vehicle demand.
Tesla’s reputation in Europe now largely depends on its CEO, unless the company decides to remove him.