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 Tesla’s favorability among Democrats has dropped to 16% as of July 16, compared to 39% in January. Among Republicans, the data shows favorability decreased to 23% from 36% in the same time period.
CivicScience CEO John Dick tells Yahoo Finance its “data has shown consistently that Democrats, more closely than Republicans, associate Elon Musk and his actions with the brand.”
And that could be problematic for the brand’s business. Tesla short seller Mark Spiegel told Yahoo Finance a potential boycott from Democrats would be “terrible” for the EV maker.
“He completely alienated most of his buying base… It’s going to 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 at this point.”
Longtime Tesla investor Ross Gerber of investment firm Gerber Kawasaki told Yahoo Finance that he’s considering selling his vehicle because Musk’s endorsement “doesn’t align with my values.”
“This final stance of Elon has put me in a really difficult moral position,” Gerber said. “I’m driving a Cybertruck and now it’s 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 antisemitic comments on X and has steadily decreased since then.
And it’s not just pushback from Democrats that potentially spells trouble ahead for Tesla. Pros tell Yahoo Finance that threats from former President Donald Trump and his running mate, Senator JD Vance, to scrap government subsidies will also be a hit to the EV leader.
“If the $7,500 credit goes away, Tesla is going to have to raise prices. And if it has to raise prices, it’s going to sell fewer cars,” Spiegel added.
Guggenheim’s Ron Jewsikow told Yahoo Finance the current $7,500 federal EV tax credit 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 to Tesla or legacy automakers. Gabelli Asset Management portfolio manager Brian Sponheimer told Yahoo Finance the topic has been a “political football for quite some time,” urging caution and a “wait-and-see approach” from investors.
Trump, though, didn’t sugarcoat his stance during his speech at the Republican National Convention. The former president told the crowd he would “end the electric vehicle mandate on day one — thereby saving the US auto industry from complete obliteration, and saving US 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’s 100% wrong,” Gerber said. “The first thing they’ll go after is all of the solar and EV tax credits. The government has a huge deficit and it’s an easy thing to kill.”
Musk, though, isn’t worried about a potential rollback in EV credits.
“Take away the subsidies,” he wrote in a post on X. “It will only help Tesla.”
Musk’s support for Trump marks a shift from his past endorsements. 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 sort of character that reflects well on the United States.”
Roughly thirty minutes after the July 13 assassination attempt against Trump at a Pennsylvania rally, Musk announced he was all in on the former president. In a post on X, Musk wrote, “I fully endorse President Trump and hope for his rapid recovery.”
Since then, Musk has used his megaphone on X to condemn Democrats and fuel narratives about the attempted assassination 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 on LinkedIn. Send newsworthy tips to Yasmin: yasmin.khorram@yahooinc.com
Seana Smith is an anchor at Yahoo Finance. Follow Smith on X @SeanaNSmith. Tips on deals, mergers, activist situations, or anything else? Email seanasmith@yahooinc.com.
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