Elon Musk’s endorsement of former President Donald Trump isn’t sitting well with potential Tesla (TSLA) customers.
New data from analytics firm CivicScience shows that Tesla’s favorability among Democrats dropped to 16% as of July 16, compared to 39% in January. Among Republicans, data shows that favorability decreased from 36% to 23% over the same period.
CivicScience CEO John Dick told Yahoo Finance that its “data has consistently shown that Democrats, more closely than Republicans, associate Elon Musk and his actions with the brand.”
And this can be problematic for the brand’s business. Tesla short seller Mark Spiegel told Yahoo Finance that a potential Democrat boycott would be “terrible” for the electric vehicle maker.
“He has completely alienated most of his buyer base… This will kill the business,” Spiegel warned. “I can’t imagine a single Democrat, or let’s say very few of them, willing to buy a Tesla right now.”
Longtime Tesla investor Ross Gerber of investment firm Gerber Kawasaki told Yahoo Finance that he is considering selling his vehicle because Musk’s endorsement “does not align with my values.”
“This final stance from Elon has put me in a really difficult moral position,” Gerber said. “I’m driving a Cybertruck and now it looks like a MAGA truck.”
According to research firm Strategic Vision, the number of Tesla owners who identify as Democrats has dropped to 26%, compared to 39% last year. The data shows a dramatic drop in November, when Musk made anti-Semitic comments on X and has been steadily decreasing ever since.
And it’s not just resistance from Democrats that potentially spells trouble for Tesla. Professionals tell Yahoo Finance that threats from former President Donald Trump and his running mate, Senator JD Vance, to eliminate government subsidies will also be a blow to the EV leader.
“If the $7,500 credit disappears, Tesla will have to raise prices. And if you have to increase prices, you will sell fewer cars,” added Spiegel.
Ron Jewsikow of Guggenheim told Yahoo Finance that the current $7,500 federal tax credit for electric vehicles is a “key affordability enabler” for the company and that repealing it would be a “negative.”
The uncertainty surrounding EV tax credits is nothing new for Tesla or traditional automakers. Gabelli Asset Management portfolio manager Brian Sponheimer told Yahoo Finance that the issue has been a “political football for some time,” urging caution and a “wait-and-see approach” on the part of investors.
Trump, however, did not sugarcoat his position during his speech at the Republican National Convention. The former president told the crowd that he would “end the electric vehicle mandate on day one—thus saving the U.S. auto industry from total destruction and saving U.S. customers thousands of dollars per car.”
“If Elon thinks paying Trump $45 million a month will somehow stop Trump from destroying the EV tax credit, he is 100% wrong,” Gerber said. “The first thing they will look for is all the solar and EV tax credits. The government has a huge deficit and it is something easy to kill.”
Musk, however, is not worried about a possible reversal in EV credits.
“Take away the subsidies,” he he wrote in a post on X. “This will only help Tesla.”
Musk’s support for Trump marks a shift from his previous support. In 2020, the billionaire said he voted for President Biden, and in 2016, he criticized Trump during his campaign against Hillary Clinton, saying, “He doesn’t seem to have the kind of character that reflects well on America.”
About thirty minutes after the assassination attempt on Trump on July 13, at a rally in Pennsylvania, Musk announced that he was fully in favor of the former president. In a post on X, Musk wrote: “I fully support President Trump and hope for his speedy recovery.”
Since then, Musk has used his X megaphone to condemn Democrats and feed narratives about the assassination attempt to his 190 million followers.
Tesla did not respond to Yahoo Finance’s request for comment.
Yasmin Khorram is a senior reporter at Yahoo Finance. Follow Yasmin on X @YasminKhorram and so on LinkedIn. Send interesting tips to Yasmin: yasmin.khorram@yahooinc.com
Sean Smith is an anchor at Yahoo Finance. Follow Smith on X @SeanaNSmith. Tips on business, mergers, activist situations or anything else? Email seanasmith@yahooinc.com.
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