Tesla sales plummet in Europe. Has Elon Musk’s reputation become a toxic asset?

Tesla’s sales in the European Union (EU) fell by 50.3% in January compared to the same month last year. In total, Elon Musk’s company sold 7,517 units in the first month of 2025, compared to 15,130 vehicles sold in January 2024.

Is this decline related to a negative consumer reaction to Elon Musk’s political positions? From the gesture he made at Donald Trump’s inauguration ceremony, widely interpreted as a Nazi salute, to his declaration of support for the far right in Germany and the spread of disinformation, particularly through the X platform (formerly Twitter), which he also owns, controversies involving the multi-millionaire have been recurring.

“Although it can’t be said with certainty that there is a direct cause-effect relationship, it is undeniable that Musk’s growing association with a highly polarising Administration has an impact on the perception of the brand, especially in a market like Europe“, says José Pedro Mozos, director of public affairs at All Comunicação, adding that the European electorate and consumers tend to “penalise figures and brands associated with extreme political movements”, so the image of Tesla’s leader may in fact be directly affecting the car manufacturer’s sales.

“From a communication perspective, Elon Musk has always been an eccentric figure to say the least, but until recently he maintained his influence within the technology sector. His recent political involvement, combined with more aggressive and polarising communication, has turned him into a personality even more likely to create divisions. Over the years, Musk has become the face of his companies, which can be an advantage in times of growth, but also a risk when his personal reputation is in decline”, he says.

Salvador da Cunha, CEO of the Lift group, admits that the drop in sales of the electric vehicle manufacturer may be partly linked to the damage to Elon Musk’s reputation in Europe, but he also sees the threat of tariffs between Europe and the United States — which “will make durable goods and services more expensive” — as a factor to take into account when justifying the drop in sales.

“Such a violent drop in Tesla’s sales must have these two factors combined”, says Salvador da Cunha, who admits that the US company may be being impacted because it is so closely associated with the image of its leader, although this perception varies according to the markets and the different fringes of society.

“The brand is paying the price in Europe and China, but it has appreciated brutally in the United States. Tesla’s shares rose by more than 50% in 2024 as a result of Trump’s election (which has since been corrected). Clearly Elon Musk’s reputation is weaker outside the United States than it is at home, and even at home there are many differences between what Democratic and Republican voters think of him. The reputation is not uniform”, he points out.

But José Pedro Mozos believes in a more direct consequence. “Tesla and Elon Musk have become practically synonymous. If for years this fusion of image has benefited the brand, now the effect may be the opposite”, he says of what he considers to be a “common vulnerability of companies that are strongly personalised around a single leader” and which is especially pronounced when “that figure takes polarising positions outside their sector”.

“Brands like Tesla, SpaceX or X itself [all owned by Elon Musk] directly reflect Musk’s decisions and personality. If on the one hand this identification has strengthened the brand among loyal consumers, on the other hand it makes it more exposed to adverse reactions when Musk takes unpopular or controversial positions”, he adds.

The reactions of society and consumers to Musk’s positions have been diverse. There are, for example, stickers for sale and in circulation that are stuck on vehicles by Tesla customers that read phrases like ‘I got this before Elon went crazy’, one of the most iconic and one that has received the most attention on social media. As recently as December, a US retailer reported that it had already sold around 18,000 of these stickers to 30 countries, according to Business Insider.

In London, a group of activists, in a guerrilla action, used the image of a bus stop as support for a fundraising campaign in which Elon Musk is seen giving the Nazi salute and the phrase ‘Tesla – The Swasticar’ is read out, accompanied by the slogan ‘go from 0 to 1939 in 3 seconds’, in a clear reference to the start of the Second World War.

What the two communications professionals agree on is that Musk’s influence is contributing to greater polarisation. “Musk’s influence has always been polarising, but it has never been as closely linked to political issues as it is now. It’s possible that the impact on Tesla will continue to grow, depending on his future public interventions and the global geopolitical context”, says the director of public affairs at All Comunicação.

Salvador da Cunha adds that the positions that the Tesla owner has been taking in support of far-right European parties also help to polarise opinions and perceptions of him, which “is never good for brands”.

“It’s one thing to be an activist CEO, and defend certain causes, but it’s another to be a far-right radical who also owns several companies. In the medium term this will be reflected in his businesses, but for now Musk’s perceived power is so great that no one dares to stand up to him. Later on, the shareholders of his companies will crucify him“, he predicts.

In terms of Elon Musk’s support for far-right parties, one example is his involvement in the campaign for the German parliamentary elections last weekend, in which he declared his support for the far-right AfD party.

This stance seems to have met with a negative reaction from consumers, since in Germany alone, the only European country that hosts a Tesla factory, the brand’s sales fell by 59% in January compared to the same month in 2024.

In Poland, the Minister of Tourism called for a boycott of Tesla following Musk’s appearance at a rally of the far-right AfD party. “All I can say is that probably no normal Pole should ever buy a Tesla again”, said Sławomir Nitras, quoted by The Guardian.

But the consequences are visible not only among individual consumers. In August, the German pharmacy chain Rossmann announced that it would no longer buy Tesla cars for its corporate fleet because of Musk’s support for Donald Trump, while the German energy company LichtBlick said on social media that it would stop using Tesla vehicles because of Musk’s support for a “right-wing populist and extremist party”, the British newspaper also reports.

However, warns José Pedro Mozos, there could also be a “habituation effect”, when “part of the public has already moved away from the brand, while consumers who remain loyal may not be so influenced by new controversies”.

“What seems certain is that Musk is unlikely to moderate his tone or distance himself from the political sphere. On the contrary, his track record suggests that he will continue to act unpredictably, which could generate new fluctuations in the perception of the brand and, consequently, in its sales”, José Pedro Mozos recommends.

To mitigate this impact, Tesla “could strengthen the company’s institutional communication, emphasising its values, technological innovation and commitment to sustainable mobility, shifting the focus of the narrative away from Musk”, says the director of public affairs at All Comunicação.

Another option would be to “give greater prominence to other company leaders, reducing the dependence on Musk’s personal image”, but “given the brand’s history and the strong centralisation on his figure, this may not be an easy strategy to implement”, he concludes.