Elon Musk’s Political Stance Costs Tesla Over 1 Million EV Sales, Report Finds

Elon Musk’s political stance has significantly impacted Tesla, resulting in underwhelming U.S. sales figures. A recent report suggests that his behavior since acquiring Twitter, now called X, has cost the automaker between 1 million and 1.26 million vehicle sales.

Impact of Musk’s Political Actions on Tesla Sales

The analysis, conducted by Yale University economists and published by the National Bureau of Economic Research, highlights the correlation between Musk’s political engagement and Tesla’s declining sales. The term “Musk partisan effect” is used to describe this phenomenon.

Estimated Sales Decline

• Tesla’s U.S. sales could have seen an increase of 67% to 83%.
• This equates to approximately 1 million to 1.26 million additional vehicle sales from October 2022 to April 2025.
• Competitors have benefited from Tesla’s losses, with their electric and hybrid vehicle sales rising by 17% to 22%.

Reasons Behind Tesla’s Declining Sales

The report links the decline to Musk’s political support predominantly for Republican candidates, including nearly $300 million in donations. His involvement with former President Donald Trump’s administration has further alienated Tesla’s primary consumer base—environmentally-conscious Democratic buyers.

Effect on California’s Zero-Emissions Goals

Musk’s actions have also hindered California’s ability to achieve its zero-emissions vehicle targets by 2026. The report indicates that these goals could have been met without the influence of the “Musk partisan effect.”

Tesla’s Market Performance

In the third quarter of this year, Tesla registrations in California dropped by 9.4%, reducing the company’s market share to 46.2%. This downturn highlights the challenges Tesla faces in retaining its customer base.

Future Outlook

Despite these difficulties, Musk’s recent shift towards innovations like robotaxis and self-driving technology may improve public sentiment. Tesla’s board Chair, Robyn Denholm, commented that perceptions of Musk’s political involvement have lessened over time, possibly indicating that future strategies could mitigate the impact of his political persona on the brand.