A Trump endorsement is the last thing Tesla needs

Tesla’s share price has halved, sales have slumped, boycotts are being organized and Chinese rivals are ready to steal the market. It has been a rough few weeks for the electric vehicle manufacturer, but Tesla’s CEO Elon Musk has been handed a lifeline by Donald Trump: the President gave his full-backing to the company by buying one of its cars. Heck, he might even have used his own money. There is just one snag: Trump’s high-profile support will make things worse for Tesla, not better.

Outside the White House yesterday, Trump chose from five shiny new Teslas. A day earlier, Trump had posted on his Truth Social feed that “radical left lunatics” were trying to damage the business and that its boss has been “penalized for being a patriot.” Brushing aside, somewhat typically, questions over whether it might breach the rules on commercial endorsements by government officials, Trump gave Tesla his full backing.

Tesla certainly needs something. Musk’s high-profile role in the Trump administration has started to hit its revenues. Tesla’s sales have slumped by 70 per cent in Germany, and halved across Europe overall. They have been falling in Australia, and across much of the US as well. Campaigns have been launched by owners who want to flog what they refer to as their “Nazi-mobile.” Even celebrities are getting in on the action: the singer Sheryl Crow has ditched her Tesla car. Investors worry that Musk’s politics — and his close ties with Trump — will irreparably damage its brand.

Tesla’s sales are in freefall precisely because many of the affluent, liberal-left customers who were the early adopters of EVs don’t like the car company’s association with populist, right-wing politics. It faced a challenging year anyway. The new generation of high-quality EVs from Chinese rivals such as BYD are matching Tesla for quality, and undercutting it on price.

If Tesla is to win back its previously loyal fans, an endorsement from Trump is the very last thing the company needs right now. It will only make matters even worse. Rather than buy a Tesla, Trump would have been better off driving away in a new BYD, or Cadillac’s luxury Lyriq EV. Buying a new one for himself is only going to deepen the crisis the company faces.