Tesla CEO Elon Musk’s divisive political moves since taking over Twitter, later rebranded as X, in 2022 have significantly dented the automaker’s US sales, highlighting how closely Tesla’s success is tied to Musk’s public image.
For the first time, researchers have quantified how the actions of the world’s richest person, including his involvement with US President Donald Trump’s administration, may have cost Tesla billions of dollars in lost sales while boosting its electric vehicle competitors.
According to a working paper from the National Bureau of Economic Research, authored by Yale University economists, Tesla’s US sales could have been 67% to 83% higher, equivalent to roughly 1 million to 1.26 million more vehicles sold, between October 2022 and April 2025, if not for what they term the “Musk partisan effect.”
Tesla has not yet commented on the report.
As Democratic-leaning buyers shifted away from Tesla, that effect also boosted the sales of competitors’ electric and hybrid vehicles by roughly 17% to 22%, the study found.
The Yale University researchers linked the drop to Musk’s increasingly partisan behavior, including his roughly $300 million in donations to Republican candidates as well as leadership of the Department of Government Efficiency (DOGE) under Trump.
Musk’s political stance has alienated environmentally minded Democratic buyers – historically Tesla’s strongest base – according to surveys cited in the report.
Sentiment toward Tesla improved somewhat as Musk pivoted the company towards robotaxis, self-driving technology and robots in human form.
Tesla board Chair Robyn Denholm said in an interview with CNBC on Monday that the outside perception of Musk spending time in the U.S. government had diminished.
The NBER paper said Musk’s actions also hampered California’s progress toward its zero-emissions vehicle goals, concluding that the state would likely have met its 2026 targets “had it not been for the Musk partisan effect”.
Registrations of Tesla cars in the state fell 9.4% in the third quarter, with its market share falling to 46.2% in the three-month period.
With inputs from Reuters
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Shivam Verma is a journalist with over three years of experience in digital newsrooms. He currently works at NewsX, having previously worked for Firstpost and DNA India. A postgraduate diploma holder in Integrated Journalism from the Asian College of Journalism, Chennai, Shivam focuses on international affairs, diplomacy, defence, and politics. Beyond the newsroom, he is passionate about football—both playing and watching—and enjoys travelling to explore new places and cuisines.
