Is Musk getting in the way of Tesla sales growth?


Is Musk getting in the way of Tesla sales growth?

Tesla CEO Elon Musk’s reputation has deteriorated significantly thanks to his online outbursts—and that may be negatively affecting Tesla sales, Reuters reports.

In a new survey by marketing analysis firm Caliber provided exclusively to Reuters, a “consideration score” for Tesla fell to 31% in February, less than half its high of 70% in November 2021, when Caliber started tracking consumer interest in Tesla.

The score fell eight percentage points in January alone, while those of Audi, BMW, and Mercedes-Benz rose into the 44%-47% range, Reuters noted. And the association of Tesla’s reputation with that of its CEO may be the reason for the lower scores, according to Caliber.

2024 Tesla Model S. – Courtesy of Tesla, Inc.

“It’s very likely that Musk himself is contributing to the reputational downfall,” Caliber CEO Shahar Silbershatz said in an interview with Reuters, adding that 83% of Americans surveyed connect Musk with Tesla.

Tesla maintained sales momentum through 2023, but is expected to post lower quarterly sales as early as Tuesday. Research firm Cox Automotive is predicting slower growth for Tesla than the overall market. Cox estimates U.S. EV sales growth of 15% in the first quarter, with 3% growth for Tesla in the same period.

More than a third of U.S. EVs are sold in California, and roughly 1 of 8 EVs sold globally from Tesla have been sold there—but Tesla registrations there did trend downward toward the end of 2023 in the state. Tesla’s share of the overall U.S. EV market also shrank in 2023—despite price cuts.

2024 Tesla Model Y. - Courtesy of Tesla, Inc.

2024 Tesla Model Y. – Courtesy of Tesla, Inc.

Correlation between the timing of Tesla’s market-share erosion and a larger share of the general public losing patience with Musk does not equal causation, though. And as an EV-only automaker, Tesla remains well ahead of the competition.

At 6 million EVs sold, Tesla has accomplished what no other startup has since the formation of legacy auto decades ago, while the Model Y has become the bestselling vehicle on the planet.

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