Elon Musk and Tesla: Is the CEO's controversial behavior responsible for company's struggles?

San Jose business development director Marian Ross is one of those consumers.

“I would never consider a Tesla because it’s Elon Musk,” Ross said, criticizing the CEO’s relatively recent public embrace of right-wing politics while she charged her Kia electric SUV at Valley Fair mall in Santa Clara. “It’s a big no.”

Musk has allowed neo-Nazi content to proliferate on his social media platform X, and criticism of his views on race have also focused on his comments about immigration. The Tesla CEO in February tweeted that Democrats “won’t deport, because every illegal is a highly likely vote at some point.” The claim, central to the groundless White supremacist “great replacement” theory, was starkly refuted by the 500,000 deportations under President Joe Biden during the previous nine months. Musk has accused U.S. media, elite colleges and high schools of being “racist against whites & Asians.”

Musk has also sought to undermine legitimacy of American elections, calling mail-in ballots and voting without government-issued identification “insane” in an echo of former President Donald Trump’s baseless attacks, despite no evidence of significant fraud. He falsely claimed, in a tweet that remains on his platform, that undocumented people “are not prevented from voting in federal elections,” a right-wing conspiracy theory. While Musk has not endorsed Trump for a second presidential term, he met with him in March, and has accused Biden of “treason” over his administration’s handling of migrants.

Meanwhile, Tesla remains embroiled in multiple lawsuits, including by the California and federal governments, alleging rampant racism at the Fremont factory where four car models are made.

However, factors outside Musk’s control weigh more heavily on Tesla than its CEO’s politics, Kim and Ives pointed out. U.S buyers’ transition to electric vehicles has slowed over the past year amid consumer worries about EV technology. And Tesla faces exploding EV competition in the U.S. and China.

While Musk may be tarnishing Tesla’s reputation among some consumers, “reputation is really about product and how reliable and or desirable that product is,” Pozner said.

Auto buyers’ decision-making is generally tightly focused on the vehicle, AutoPacific’s Kim said.

“Most consumers, even conscientious consumers, often don’t actually make their purchasing decision based on the politics of the head of the company,” Kim said.

Some people, even Tesla owners, do not even know Musk heads the company, or pay attention to controversies around him.

“Is he still the CEO?” asked Tesla Model S owner Rafael Alhambra, a 30-year-old pharmacy technician from Sunnyvale. “I don’t ever watch his interviews or anything.”

In public statements, Musk has charted a recent, sharp political turn from left to right. In May 2022 he said he used to vote for Democrats, but “they have become the party of division & hate, so I can no longer support them and will vote Republican.” Musk in January told CNBC he voted for Biden in 2020, but, “I cannot see myself voting for Biden this time.”

Prospective CEOs in elite business schools like Berkeley’s Haas are taught to present a neutral public face to avoid alienating customers, but Musk enjoys provocation, said Chatman, the management professor.

“It’s part of his character to be impulsive and to express his views,” Chatman said. “He believes that even if he doesn’t have all the information he’s so brilliant that whatever he says is going to be important.”

As Tesla’s competition escalates, Musk’s inflammatory rhetoric could prove more costly, business experts said. “At some point shareholders are going to get very unhappy if they believe that Musk is having a detrimental impact on the company’s success,” Chatman said.

San Jose State University engineering technology student Cameron Squire bought his Tesla Model 3 in 2018. His admiration for Musk as a figure akin to the Iron Man superhero has waned only slightly as the CEO has become more “eccentric,” he said.

“I don’t hate him,” Squire said. “But if I wanted to put bumper stickers on this car I’d get the, ‘I bought this before I knew Elon was crazy’ sticker.”