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Tesla CEO Elon Musk is facing backlash for publicly supporting former President Donald Trump, which could potentially harm the company’s brand reputation and sales among Democratic consumers. Musk acknowledged that a second Trump Administration could adversely affect Tesla’s business by ending EV-related subsidies and increasing import tariffs, impacting both sales and production plans. The company’s stock dropped 12.3% following the earnings call.

California, a key market for Tesla, saw a significant drop in sales in the first half of the year, with overall vehicle sales down 17%. Democrats, who are more likely to purchase electric vehicles, have a more favorable view of EVs compared to Republicans. Musk’s support for Trump has led to a decrease in favorability among Democrats, which could pose a threat to Tesla’s bottom line. Civic Science research shows a decline in favorability towards both Musk and Tesla among Democrats this year.

While Musk tried to generate excitement during the earnings call by highlighting Tesla’s robotaxi ambitions and humanoid worker robots, it remains unclear how these products will impact the company’s earnings in the future. Some investors, like Ross Gerber, have expressed their dissatisfaction with Musk’s political stance and decision to support Trump. Gerber has put his 2021 Tesla Model S up for sale, signaling his departure from the brand despite acknowledging the vehicle’s quality and value.

With the polarizing views on EVs and political affiliations, Tesla’s association with Trump could lead to more Democrats shunning the brand, further impacting sales and market perception. The California market, which accounts for a significant portion of Tesla’s sales, has seen a notable decline, reflecting the potential backlash from Democratic consumers. Musk’s decision to publicly support Trump has caused a stir among investors and consumers, with some choosing to distance themselves from the brand.

As Musk’s favorability among Democrats declines and his appeal among Republicans increases, there is a noticeable shift in perception towards both Musk and Tesla. The potential alienation of Democratic consumers, who are more likely to purchase EVs, poses a significant risk to Tesla’s market share and profitability. The company’s future prospects and success may be influenced by how it navigates the political landscape and responds to consumer sentiments in an increasingly divided market.

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