Are We Witnessing Tesla’s and Musk’s Corporate Downfall?

Tesla is inevitably strongly associated with the person Elon Musk. He is undoubtedly the main reason for the company’s success and the positive image of electric cars. As long as he showed his leadership in his companies, all his not-so-positive peculiarities were gladly overlooked. His biographer Walter Isaacson reported on some of these characteristics, such as his “demon mode” and his way of creating urgency even when it didn’t seem necessary. Or the fact that he liked to fire people off the cuff.

But in recent months, Elon Musk’s negative behavior seems to have become more prevalent. His takeover of the social media platform Twitter, which he has turned into a hotbed of hate speech, right-wing extremists and trolls, was very publicly visible. Not that Twitter was free of this before, but the problems worsened dramatically and advertisers left the platform in droves, causing the value of X – as Twitter is now known – to plummet by two-thirds. And advertising revenue is no longer to be seen as advertisers avoid the platform like the plague.

And after Musk sponsored Donald Trump to the tune of 250 million dollars when he was re-elected US President and apparently threw previously held positions (oil is bad, electric cars are good) overboard, the vicious circle has only accelerated. In Germany and Europe, Musk’s endorsements of the far-right Alternative for Germany (AfD) have caused a stir. He even gave party leader Alice Weidel a platform by hosting her for a live stream on X and appearing on the video screen at an AfD election event.

The topics and opinions discussed by Musk and Weidel showed historical disinformation and ignorance. For example, the two said that Hitler was actually a communist.

Question: how right-wing extremist do you have to be for Hitler to appear left-wing?

This wasn’t the first time Trump has given a platform to right-wing extremists and conspiracy theorists, and one gesture in particular, which is clearly a Nazi salute, stood out. Even though some wanted to excuse this twice-done gesture as something innocent, everyone refused to repeat it themselves. Leadership coaches would always advise their managers to avoid such a gesture at all costs. That actually says everything about how this gesture should be interpreted.

Immediately after Trump’s election as the 47th president, Tesla’s share price doubled, but the fluctuations are massive and a plateau seems to have been reached. Not least because further economic measures are directly affecting Tesla and other Elon Musk companies. Namely through retaliatory measures.

For example, the punitive tariffs announced and imposed by US President Donald Trump against Mexico and Canada were quickly withdrawn when Canada, for example, also began to impose punitive tariffs on goods from US states governed by Republican governors, removing products from stores in these states and Ontario terminated a 100 million dollar contract with Elon Musk’s Starlink. The affected countries, including China, have also imposed punitive tariffs directly against Tesla. The EU also wants to impose measures directly against Tesla.

And now Musk’s intrusion and coup-like behavior with the US Treasury Department leaves a bitter and totalitarian taste in the mouths of the American public, the US Congress and the rest of the world. And the worst could be yet to come, and frankly, you don’t want to imagine it. Trump and Musk are plunging the US into unnecessary chaos with their ideology and vindictiveness.

The effects on Musk’s companies can already be seen, most prominently at Tesla.

Effects on Tesla

Elon Musk’s behavior seems to have a direct impact on Tesla and is slowly dragging Tesla into the abyss. In California, Tesla’s sales figures fell by 11.6 percent in Q4. Tesla’s market share in the Golden State dropped from 60 percent in 2023 to 52.5 percent in 2024. If you take Tesla’s numbers from California sales, then sales in California increased by 20 percent. If Tesla is included, then electric car sales rose by 1.2 percent.

The Cybertruck, on the other hand, for which there were reportedly one million pre-orders, turned out to be a slow seller. Ultimately, these pre-orders resulted in only 40,000 units actually being delivered, despite tax subsidies, price reductions and additional offers such as free wrapping. It doesn’t help that Cybertruck owners are increasingly experiencing their vehicles being targeted by vandals who are referring to Musk. Several examples of such hate attacks on Cybertrucks can be seen on the YouTube channel Wham Baam Teslacam, starting at 6:03, 7:06 and 8:44.

However, sales figures are also falling for Tesla in Europe. In January 2025, Tesla sales fell by 47.7 percent compared to January 2024. Not only that: the Model Y was toppled from the top spot as the most popular car in Europe and even overtaken by the VW Golf again.

The brand is also suffering greatly from Musk’s appearance. In Sweden, only 11 percent associate positive things with Tesla and the brand value fell from 58 billion to 43 billion dollars.

The share of Swedes having a positive view of Tesla declined to 11% in a Novus survey conducted after Trump’s inauguration from 19% in a similar poll conducted Jan. 15-17, while those who said they had a negative view rose to 63% from 47%, TT reported.

Even if Fred Lambert from electrek also partly justifies the weakening sales figures with the aging models, it should not be underestimated how much the brand is damaging the company under Elon Musk’s behavior. I myself have canceled my Cybertruck, as I explained and justified in a LinkedIn post and my newsletter three months ago, and the controversy has been remarkable. The feedback ranged from the nastiest abuse to supportive comments.

In the meantime, I’ve heard the same confessions from many acquaintances who swore by Tesla in the past. They want to get rid of their Tesla and are now buying other brands. One Austrian CEO, who was a Tesla supporter himself, even told me that they no longer allow Teslas as company cars in his company.

Quo Vadis, Tesla?

Will a facelift of the Model Y help? Initial order figures in China may indicate this, but the Chinese have a comparable and cheaper choice with their domestic brands, with which they can also show patriotic awareness. Will the Roadster coming in 2025 help? Probably not, as it will be an expensive niche product. And what about the Cybercab? That first has to hit the roads and FSD has to deliver on its promises.

The question now for many is whether they want to throw their money at such an erratic character as Elon Musk and sign contracts with him? The former Twitter advertisers who are now facing a lawsuit filed against them by Musk because they no longer want to advertise on his platform among right-wing extremists and hate speech have a clear answer.

For the Tesla Supervisory Board, the question of replacing Elon Musk as CEO and unraveling this man’s connection to Tesla is becoming more urgent. Otherwise he could drag the company into the abyss.

UPDATE: just as I write this, electrek reports about it. There seems to be some momentum building among Tesla shareholders who want to address Elon Musk’s behavior and are not shying away from the suggestion that he be removed as CEO.

Personally, I am now wavering between Lucid Gravity and Rivian R1S as my car after my Tesla Model 3.Any recommendations?

Books on Silicon Valley, the future, artificial intelligence, innovation, t he automotive industry or how not to apologize, in other words all good books from me. And I want to recommend them to you.

All books are available on Amazon, from the Plassen and Beck publishing houses, or from your favorite bookseller. They are even available as ebook here, for example.

This article was also published in German.