Adapted by:
Rubén Andrés
WriterWriter at Xataka. I've been working remotely for more than a decade and I'm a strong advocate of technology as a way to improve our lives. Full-time addict of black, sugar-free coffee.
Alba Mora
WriterAn established tech journalist, I entered the world of consumer tech by chance in 2018. In my writing and translating career, I've also covered a diverse range of topics, including entertainment, travel, science, and the economy.
Tesla has become synonymous with innovation and success in the electric mobility sector, boasting a respected brand image and a strong position in the stock market. Some have even referred to it as the “iPhone of EVs.” However, CEO Elon Musk’s involvement in politics has compromised both the company’s reputation and its financial performance.
Musk’s political endeavors have directly impacted Tesla’s public perception and sales. The company’s fate is closely tied to that of its CEO. As such, any decline in sales also negatively affects Musk’s personal wealth.
Before Musk’s political involvement. Tesla used to be regarded as one of the leading tech companies worldwide, with the potential to surpass a market cap of $1 trillion. The company stood alongside giants such as Apple, Microsoft, and Amazon. Its growth appeared unstoppable due to strong investor confidence and the increasing demand for electric vehicles.
During this time, Musk’s personal fortune reached record heights, exceeding the $300 billion mark for the second time. Tesla’s shareholders considered it a safe investment, and Musk was richly rewarded for the company’s success.
After Musk entered the political arena. His involvement in politics sparked a divide among investors. Some believed aligning with Trump, who’s openly against EVs, would provide strategic advantages for Tesla. Others were concerned that Musk’s actions could jeopardize the company’s image. Initially, the stock market euphoria following the government transition buoyed Tesla’s shares. It pushed them to record highs and elevated Musk’s fortune to more than $420 billion.
However, the situation changed dramatically after the election when Musk assumed the role of head of the Department of Government Efficiency. Tesla’s reputation declined rapidly as the new department introduced unpopular policies, making Musk the Trump administration’s “wrecking ball,” according to the Financial Times.
Musk and Tesla, Tesla and Musk. Tesla’s reputation is closely linked to Musk’s persona. As a result, when Musk’s popularity declined, so did Tesla’s standing, leading to an unprecedented reputational crisis.
In the first quarter of 2025, Tesla’s sales dropped by 13%, while revenue fell by 9%, totaling $19.33 billion. Net profit plummeted by 71%, to just $409 million. The financial crisis also affected those who chose to sell their Teslas in 2025. Musk’s tarnished reputation and increased available models led to a decline in resale values in the second-hand market.
Musk’s (declining) popularity. A recent CNBC survey revealed that 47% of respondents have a negative opinion of Tesla, while only 27% maintain a positive view of the manufacturer. The CEO’s ratings show similar trends, with 50% of respondents expressing negative opinions and 36% offering support.
“Where Tesla is strongest is among people least likely to buy an EV,” Micah Roberts, a partner at Public Opinion Strategies, the Republican pollster that conducted the study, explained. This suggests that those who support Musk’s political stance may never become customers of his brand.
Forced retirement at Tesla. In response to declining performance and pressure from Republican lawmakers and Tesla investors, Musk has implicitly acknowledged that he hasn’t dedicated enough time to the company. During a recent earnings presentation, he promised to “significantly” reduce his political involvement starting in May to help the brand recover from the issues he’s contributed to.
In just a few months, Musk’s wealth has mirrored Tesla’s ups and downs. While the value of his shares in the company has dropped significantly, the impact on his personal fortune has been offset by the growth of SpaceX and xAI, his other companies. Without the strong performance of these ventures, the troubles at Tesla would have had even more serious consequences for Musk’s wealth.
Image | Chris Boland
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