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What We Know
News circulated through media outlets last week that Tesla CEO Elon Musk publicly endorsed Donald Trump’s election bid, with the Wall Street Journal reporting that Musk was rumored to commit $45 million per month to Trump’s campaign. Musk has since denied the claim, while still expressing his support of Trump and reassuring investors that the potential removal of EV subsidies by a new Trump administration would benefit Tesla in the long run.
Meanwhile, Tesla shares fell Wednesday morning after a second quarter earnings report showed the company missed earnings estimates, although reporting better than expected revenue. The recent events raise questions about the future of the EV maker, which CivicScience consumer data has shown to be declining in popularity among American consumers over the past year.
What We’re Seeing
Here’s what CivicScience’s ongoing data tracking reveals about Tesla, its CEO, and the EV market in general:
- EV interest appears to have peaked, as intent to purchase an electric vehicle has fallen precipitously over the past two years to a low point of 20% in Q2. Cost has been cited as the leading barrier to entry for consumers who would consider purchasing an EV, followed by infrastructure and performance concerns.
- Despite lowering prices, favorability for Tesla has also been in something of a slump this year, with monthly averages of 23% or less since March. That’s the lowest run seen since CivicScience began tracking favorability in 2015.
- A deeper dive shows that Tesla favorability reached a low of 18% in July among U.S. adults who lean Democrat/liberal (as of July 23), down from 39% in January, with those unfavorable to the brand holding an 18-point lead over favorables.
- Favorability among Republicans/conservatives has also clocked in lower than average in the past several months. But unlike Democrats, favorability slightly improved among Republicans in June and July to 22%.
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What We Can Learn
Favorability is underwhelming, but intent to purchase a Tesla remains steady:
- People at large are likely to have opinions about the high-profile Tesla brand, but data show intent to purchase a Tesla has remained unchanged since the the fall, even among its left-leaning customer base: 10% of Democrats/liberals report they are ‘extremely’ likely to purchase a Tesla in the next year, the same percentage seen in October, and continuing to outpace Republican/conservative (6%) and independent/moderate (8%) likely buyers.
- While Musk’s political stance could alienate new EV buyers in a tough market, those who are more serious about a Tesla purchase appear less likely to be concerned. Tesla appeals to a particular demographic.
That said, capturing a larger share of the EV market could pose a bigger challenge for the brand:
- The EV buyer base swings harder to the left in the U.S. – Democrats are twice as likely as Republicans to purchase an EV. Democrats are also more likely to associate Elon Musk with the brand, and to be less interested in Tesla as the result.
- In a highly polarized political climate, the majority of Americans are sensitive to a brand’s stance on social or political causes. In fact, 57% say they are at least ‘somewhat’ likely to boycott a company based on the political figures its leadership supports.
- Toyota remains the top maker among EV intenders: 30% of potential EV buyers report they would most likely purchase a Toyota, followed by 22% who would purchase a Tesla. Other makers are taking their share of the U.S. EV buyer market, including Ford, Honda, Chevrolet, and Rivian.
What To Take Away
The EV market has slowed down in 2024 as consumers hold on making major purchases in general. While the Tesla CEO’s political endorsement may not be reflected in current Tesla intent, it’s not likely to help Tesla’s growth, at least among the broader current EV buyer base. However, Musk has stated that the future of the company lies in AI, calling for more investments into xAI.
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