Tesla shares were at a five-month low, Tesla showrooms in the US are being vandalized, Tesla cybertrucks were set on fire in Seattle, and the electric vehicle maker’s sales are down in the US and Europe. That US President Donald Trump has bought a Tesla car might seem like good news, signalling support at the highest level. But that might only serve to worsen Tesla’s fortunes.
The key problem underlying Tesla’s woes is the conflict between the social intelligence underpinning the sale of electric vehicles and the society-agnostic vision of tech-driven progress that the company’s chief executive Elon Musk stands for. Social imagination is definitely getting the better of technological aspirations.
In the US, the people who are willing to invest in an electric car tend to be those who are willing to take on a certain amount of personal inconvenience in the service of the larger public good. Electric cars are more expensive than conventional internal combustion engine cars, and come with attendant anxieties such as concerns about how far the car can go and about its battery draining while stuck in a traffic jam.
Those willing to take on these risks and pay extra to buy a Tesla are typically those who care for the climate and believe in the ability of technology and human ingenuity to solve society’s problems—with the help of supportive government policy and, if needed, government funds. In the US, such people overwhelmingly tend to be Democrats.
Before Tesla boss Elon Musk hitched his wagon firmly to Republican Trump’s Make America Great Again (MAGA) platform, donating $288 million to the businessman-politician’s presidential campaign and making public appearances wearing a MAGA cap, 23% of Democrats had said they were willing to buy Teslas.
The proportion of Republicans ready to buy electric cars was 15%. Liberals who had purchased a Tesla are trying to sell it or are driving around with bumper stickers that proclaim they had bought the car before Musk went crazy, according to the Wall Street Journal.
Now, more Republicans say they are willing to buy electric cars but view Green Transition claims with suspicion, seeing climate change as little more than a liberal conspiracy. Trump removed former US President Joe Biden’s electric car mandate after replacing him at the Oval Office in January, but now says the government will buy a number of Tesla cars. Trump’s ‘Drill, baby, drill’ election campaign slogan rides shotgun in an electric car with distinct unease.
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Musk’s politics versus his EV evangelism
Tesla sales have fallen 7% in the US and by a similar proportion in Europe. The drop in sales would have been vicious if Biden had not slapped an import duty of 100% on electric cars from China. Chinese e-vehicles are not just way cheaper but also technologically ahead in terms of battery chemistry and weight.
Also, Musk’s role in downsizing government staff and cutting budget outlays for farm produce that are reliant on purchase by the US government’s foreign aid programmes—both stemming from his influence over the Trump administration’s Department of Government Efficiency—has invited considerable resentment against the unelected tycoon’s actions in dismantling the government as they knew it.
Besides, Republicans who bought into Trump’s anti-immigrant narrative are wary of Musk’s championing of immigrants with tech talent on H1B visas.
In Europe, Tesla’s attempt to break the union at its Swedish plant has been met with boycotts across Scandinavia. Musk’s recent fulminations against mainstream Europe’s liberal consensus and his vocal support for Germany’s far-right party, the Alternative für Deutschland, which most Germans consider to be a modern reincarnation of the Nazis, have also led to mass resentment against Musk and his electric car company. Britons have not taken kindly to Musk’s support for Britain’s far-right party, Reform UK.
Even as Trump’s political proclivities militate against the popularity of Tesla, other carmakers are rolling out their own electric vehicles, apart from the Chinese electric vehicle majors. Japan’s Toyota is set to roll out seven new EV models in Europe.
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In the meantime, Musk has scrapped a planned, low-cost model from Tesla (a price tag of $25,000 being considered low-cost in Musk’s universe). His focus is now on how to make wholly driverless models, for which he anticipates huge demand in the taxi market.
His driverless technology relies on multiple camera inputs and their processing by artificial intelligence. Google subsidiary Waymo’s driverless technology makes use of multiple inputs apart from cameras—Lidars, for example. The efficacy of Tesla’s driverless technology, in comparison with those of rivals, is yet to be established.
The reaction against the Tesla boss’ politics is redounding on Tesla sales and hurting the company’s share price. Whether this would lead Tesla shareholders to seek Musk’s replacement with a politically anodyne boss remains to be seen.
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