Tesla’s meteoric rise from a Silicon Valley startup to the world’s most valuable automaker is inextricably linked to one man: Elon Musk. His vision and personality have been a driving force behind Tesla’s success, making him the company’s greatest asset. Yet in recent years, the same larger-than-life persona has sparked controversies and backlashes that threaten to undermine Tesla’s brand and business. This dual nature of Musk’s influence – as both Tesla’s biggest asset and its biggest liability – has come into sharp focus as the electric vehicle pioneer faces new challenges.
Elon Musk: Tesla’s Greatest Asset
Elon Musk’s personal brand and media presence have been invaluable to Tesla, allowing the company to thrive with virtually no advertising. Tesla famously spends $0 on paid advertising, yet Musk’s near-constant spotlight in the media and his 140+ million followers on X (formerly Twitter) keep Tesla in the public conversation. The company has relied on word-of-mouth buzz, viral stunts, and Musk’s knack for capturing attention to promote its cars. For example, the 2018 launch of a Tesla Roadster into space aboard a SpaceX rocket was not only an engineering feat but also a marketing masterstroke that cost Tesla nothing in ad dollars. Musk’s Twitter presence similarly serves as an unofficial marketing channel – each product tease or bold proclamation often garners headlines worldwide. This unorthodox marketing strategy has saved Tesla billions and created a devoted fan community to champion the brand.
Musk’s visionary leadership and engineering genius are widely credited with Tesla’s technological edge. He has cast an inspiring long-term vision of a sustainable, electric future that has rallied customers, employees, and investors around Tesla’s mission. Under Musk’s guidance as CEO and "Product Architect," Tesla pushed the auto industry toward innovations like long-range lithium-ion batteries, over-the-air software updates, and high-performance electric powertrains. These breakthroughs helped turn Tesla from a niche EV maker into a global automotive force. “Tesla is what it is because of Elon and because of his outsized persona,” notes Margaret O’Mara, historian and specialist of the Silicon Valley at the University of Washington, in The Atlantic. Musk’s “Elon mystique” – his image as a daring innovator who builds rockets and tunnels while revolutionizing cars– has been key to cranking up Tesla’s stock price and fuelling public fascination with the company. Indeed, Tesla’s market capitalization soared past $650 billion in just over a decade, far beyond that of established car giants, as investors bought into Musk’s bold promises.
Another often overlooked asset is Musk’s political influence and direct access to policymakers, which has benefited Tesla on strategic fronts. He isn’t shy about leveraging his status to push for favourable policies. Musk previously sat on White House advisory councils and more recently has courted both U.S. and foreign officials to advance Tesla’s interests. In the United States, he cultivated ties that were seen as opening doors for regulatory approvals on cutting-edge projects like autonomous driving. For instance, Musk’s early alignment with government leaders was viewed as an advantage in easing rules for self-driving cars. In Texas, where Tesla’s newest Gigafactory is located, the state’s hands-off approach to regulating autonomous vehicles aligns neatly with Musk’s philosophy – allowing Tesla to test robotaxis without onerous permits. Musk’s clout also helped Tesla secure rapid approvals and incentives for new factories, such as the Gigafactory in Shanghai that was built with remarkable speed and support from Chinese authorities. Few CEOs can call up a governor or even a president, but Musk’s celebrity and sway have given him a direct line to decision-makers, from the Biden administration to France’s President Emmanuel Macron. This influence has helped Tesla navigate bureaucracy and gain goodwill, whether in obtaining environmental approvals or shaping EV-friendly legislation.
Crucially, Musk’s presence has boosted Tesla’s stock, sales, and ability to attract talent and investors to levels that likely would have been impossible without him. Tesla’s stock valuation has often been buoyed by what analysts dub the “Elon premium” – a belief that with Musk at the helm, Tesla can achieve the impossible. Early believers were handsomely rewarded as Tesla’s stock skyrocketed nearly 700% from 2019 to 2021, turning the company into a trillion-dollar heavyweight. Musk met ambitious performance milestones years ahead of schedule, delivering results that sent Tesla’s valuation surging. This market optimism has enabled Tesla to raise capital cheaply and fund its expansion into battery plants, new models and other ventures. Musk’s star power also acts as a magnet for top engineering talent. Many young engineers and software developers, inspired by Musk’s bold vision – whether it’s colonizing Mars or solving autonomous driving – have flocked to Tesla and his other companies. Internally, Musk’s hands-on engineering contributions (such as obsessing over battery chemistry or insisting on falcon-wing doors for the Model X) have pushed Tesla to innovate quickly. Externally, his showmanship – from demonstrating the Tesla Roadster’s acceleration to personally rolling out new models on stage – creates free advertising and hype that translate into eager customers. It is no exaggeration to say Musk has been the public face, chief evangelist, and creative engine of Tesla, and that the company stock price and by extension its financial might have been built in large part on Musk’s persona. In sum, Elon Musk has historically been Tesla’s greatest asset – the visionary leader whose personal brand, political connections, and technological audacity propelled the company to heights few imagined possible.
When Musk Becomes a Liability
In recent times, however, Musk’s very qualities that once boosted Tesla are increasingly seen as liabilities. His controversial political statements and social media behaviour have alienated portions of Tesla’s customer base and investor pool, especially in the U.S. and Europe. Musk has grown more vocal on divisive issues, frequently posting political memes and opinions on X that skew rightward and sometimes veer into conspiracy. He is known for having urged his supporters to vote for a specific party in certain elections, such as in Germany with the AfD, in the United Kingdom with Reform UK or in the United States with the Republican Party, and has therefore engaged with controversial figures such as Alice Weidel, Nigel Farage and Donald Trump. Such behaviour marks a stark shift from the years when Tesla’s brand was largely apolitical and eco-focused, appealing to environmentally conscious, often liberal-minded consumers. Now, as Musk openly aligns himself with polarizing politics, Tesla’s image has shifted from an aspirational green tech brand to, in the eyes of some, a political Rorschach test, as Jamie Powell already wrote in an article in the Financial Times in 2019.
The backlash has been significant. In Europe, where Tesla once symbolized progressive innovation, Musk’s endorsement of right-wing politicians has hurt the brand. In Germany – a key EV market – Musk’s public praise for the far-right Alternative für Deutschland (AfD) party alienated many environmentally conscious buyers, contributing to a stunning 59% plunge in Tesla sales in January 2025. Across Europe, disillusioned Tesla owners have even taken to labelling their cars with stickers that read “I bought this before Elon went crazy,” signalling embarrassment over Musk’s antics.
In the U.S., Musk’s forays into culture wars and contentious issues (from COVID-19 policies to transgender pronouns) have turned off liberal-minded customers who once championed Tesla. The impact is not just reputational: it’s starting to show up in Tesla’s sales and stock price. In California, traditionally Tesla’s stronghold, sales fell 12% in 2024 amid growing competition and some customers’ aversion to Musk’s politics.
Musk’s polarizing persona has made Tesla a target of public protests and even vandalism. Over the past year, disgruntled activists have picketed Tesla showrooms in New York and California, urging boycotts of the brand specifically because of Musk. Signs at these protests read slogans like “Stop Musk’s coup” and “Don’t Buy Swasticars,” the latter crudely comparing Tesla’s logo to a swastika in protest of Musk’s perceived flirtation with extremist rhetoric. In one extreme incident, a Tesla store in Colorado was vandalized with graffiti reading “Nazi cars” after Musk made headlines for echoing far-right memes. Online, forums such as Reddit’s r/Tesla have seen lifelong fans voice embarrassment at Musk’s behaviour and advocate for Tesla to distance itself from its CEO. This is a remarkable turn for a company that once inspired Apple-like devotion. As one disappointed owner lamented in a Guardian interview, “I’m embarrassed driving this car around” after Musk’s political pivots – a sentiment now shared by many who once saw owning a Tesla as a badge of honour.
Beyond image, there are practical concerns about Musk’s divided attention and its impact on Tesla’s leadership. Musk today wears many hats: he leads SpaceX, oversees the social media platform X, helms brain-chip startup Neuralink, and even serves as an advisor in U.S. politics. Tesla now commands only a share of Musk’s time and mindshare. Investors have grown nervous that Musk is stretched too thin to effectively address Tesla’s challenges. Each high-profile distraction – be it the chaotic takeover of Twitter (X) in late 2022 or the management of SpaceX’s Mars ambitions – exacerbates worries that Tesla is no longer Musk’s top priority. Indeed, Musk has diverted Tesla talent and resources to his other ventures in recent years. During the Twitter acquisition, he sold nearly $23 billion worth of Tesla stock to finance the deal, rattling investors. He also reportedly pulled Tesla engineers to help at Twitter and has hinted at using Tesla’s AI expertise for his social media and AI projects. While Musk insists, he can juggle multiple ventures, some analysts now view his ubiquitous presence as a risk factor. “Investors are increasingly uneasy about Musk’s divided focus,” observes a Saxo Bank analysis, noting that Musk’s multiple CEO roles – and even a controversial government role – have made him a source of uncertainty for Tesla’s future. The hard numbers reflect this concern: by early 2025, Tesla’s stock had underperformed the market, sliding about 40% from its recent peak, even as other tech giants (the so-called “Magnificent Seven”) rallied. Tesla was the worst-performing of that elite group, a sign that Musk’s controversies and Tesla’s slowing growth have soured some investors’ sentiment.
Musk also brings other problems to Tesla and its shareholders, particularly when it comes to his remuneration. One of the most contentious financial battles surrounding Musk and Tesla is the $56 billion pay package that was approved in 2018 but has since faced legal and shareholder scrutiny. The compensation plan, which was entirely performance-based, rewarded Musk with stock options as Tesla reached ambitious milestones. However, in January 2024, a Delaware judge voided the package, ruling that it was “an unfathomable sum” granted without proper oversight and that Tesla’s board lacked independence in approving it. This decision had major financial and strategic implications, as Musk had already sold a significant portion of his Tesla shares over the years, nearly $39 billion worth between 2021 and 2023. Now, Tesla’s board and Musk are pushing to re-award these shares for free, despite the fact that he previously liquidated billions in stock at peak prices. The situation has sparked criticism among shareholders who argue that Musk is being unfairly compensated twice—first by cashing out at market highs and now by having Tesla essentially gift him the stock back. In response to the Delaware ruling, Musk demanded a shareholder vote to reinstate the pay package, framing it as a referendum on his leadership. In June 2024, 72% of Tesla shareholders approved the compensation plan once again, showing strong loyalty to Musk. However, the Delaware court rejected this attempt, stating that Tesla lacked the procedural grounds to overturn the initial ruling. This legal battle has also triggered major tax and accounting implications for both Tesla and Musk. If the package is not reinstated, Musk could face a tax liability of up to 57% on the original grant, while Tesla might have to recognize a multi-billion-dollar accounting charge related to the voided compensation plan. Facing these pressures, Tesla is now considering appealing the court decision or crafting a new executive pay structure that could satisfy both Musk and regulators. The outcome will be pivotal—not just for Musk’s personal wealth, but for Tesla’s financial stability and governance, as the company grapples with how much control it is willing to cede to its controversial CEO.
All of this has contributed to Tesla’s brand undergoing an unmistakable image shift. What was once seen as the car of the future – clean, high-tech, and universally admired – is now, to some, a polarizing emblem. Surveys indicate Tesla’s brand favourability has fallen sharply among key demographics that used to be its champions. Corporate customers and government fleet buyers in Europe, for instance, have reportedly reconsidered purchases due to Musk’s reputation. Even Tesla’s board appears cognizant of the Musk factor, as directors have been selling a lot of shares since the beginning of the year (in February 2025, Tesla's Chief Financial Officer, Taneja Vaibhav, sold 7,000 shares for approximately $2.68 million, Chairwoman Robyn Denholm sold 112,390 shares totalling over $43 million and Kimbal Musk, Elon Musk's brother and a Tesla board member, sold 75,000 shares worth about $27.5 millions). Yet Musk remains unapologetic and continues to tweet (or post on X) with impunity, seemingly confident that any short-term backlash will not overcome Tesla’s long-term appeal. This sets the stage for a pivotal question: Can Tesla overcome these controversies and continue to thrive, or will Musk’s antics put the brakes on its momentum?
Tesla at a Crossroads: Balancing Musk’s Influence with Broader Challenges
Tesla now faces a complex reality that requires balancing Musk’s outsized influence with broader industry challenges. The company’s recent struggles underscore that even aside from Musk’s behaviour, Tesla is not impervious to market forces. After years of exponential growth, Tesla’s sales and stock are experiencing a comedown. The company that once could do no wrong in investors’ eyes saw its share price tumble by more than 65% from its all-time high in late 2021 to early 2023. While Tesla stock rebounded for a time, it remains volatile. In April 2024, Tesla shocked markets by reporting an 8.5% drop in deliveries – the first year-over-year quarterly sales decline since 2020. The miss was attributed to a combination of factors: higher interest rates dampening car demand, aging product lineup, and intensifying competition. Tesla’s flagship models, S, 3, X, and Y, have seen only incremental updates even as rivals introduce fresh designs. Meanwhile, Tesla’s aggressive price cuts to stimulate demand have squeezed profit margins, raising concerns on Wall Street that the company’s vaunted growth is hitting limits.
Perhaps Tesla’s biggest external challenge is the onslaught of competition, especially from Chinese EV makers and traditional auto giants. In China, the world’s largest EV market, Tesla’s once-dominant position has been eroded by fast-moving local players. Companies like BYD, Nio, and Xpeng now offer vehicles that rival Tesla’s in performance – often at lower prices. BYD has surged ahead. It overtook Tesla as the world’s top seller of electric vehicles in late 2023, when including hybrids, and even in pure electrics it is closing the gap. In 2024, nearly 17.1 million electric vehicles were sold worldwide, including 1,789,226 by Tesla and 1,764,992 by BYD, giving them a global market share of 10.5% and 10.3%, respectively. BYD and Tesla are neck and neck, but the Chinese manufacturer is growing much faster (+12% compared to -1.1%). Competitors have also leveraged technology – many Chinese models boast advanced driver-assist AI and amenities tailored to local tastes – narrowing Tesla’s tech advantage. Traditional automakers like Volkswagen, GM, and Ford have awakened, investing tens of billions into EVs. In Europe, Volkswagen Group and its subsidiaries now collectively outsell Tesla in EVs, and European newcomers are chipping away at Tesla’s lead in markets like Germany and France. As a result, Tesla’s market share is slipping across key regions, from Europe to its home turf in California.
Tesla’s technological lead is also being tested. While the company still boasts an industry-leading range and a vast Supercharger network, its much-hyped Full Self-Driving (FSD) software has yet to deliver true autonomy. Musk has for years promised that a fleet of Tesla “robotaxis” is just around the corner – even suggesting Tesla cars would gain appreciating value once they drive themselves. Those robotaxis have not materialized, and rivals like Waymo and Cruise have leapt ahead in deploying robo-taxis (albeit in limited geofenced areas). Regulatory scrutiny over Tesla’s Autopilot system has escalated after a series of accidents, with U.S. safety regulators probing whether Autopilot’s design is flawed. Musk’s tendency to overpromise on autonomy has begun to strain credibility. Internally, Tesla has shifted more focus into developing its Dojo supercomputer and AI, indicating it still believes an AI breakthrough will unlock full self-driving. But as of 2025, autonomous driving remains a work in progress industry wide. Musk’s recent announcement that Tesla will prioritize “autonomous ride-hailing” in a city like Austin by mid-2025 raised eyebrows. Texas’s ultra-lax regulatory environment might let Tesla deploy driverless cars quickly, but legal experts warn any mishap will put liability squarely on Tesla – a risk Musk seems willing to take. Beyond cars, Tesla is venturing into humanoid robots (the Optimus project) and AI software, betting that these could be game changers for its future. However, each of these moonshot projects carries uncertainty and demands heavy investment, all while the core car business faces pressure.
In synthesizing Tesla’s current situation, it’s clear that Musk is both part of the solution and part of the problem. On one hand, his genius, ambition, and charisma-built Tesla into what it is today – and he continues to push the company toward ambitious goals like a self-driving car network and AI robotics that could define the next decade. Tesla’s devoted shareholder base often expresses near-religious faith in Musk’s ability to overcome obstacles, a confidence that has sustained the company through past crises. On the other hand, Musk’s polarizing behaviour and juggling of responsibilities pose undeniable risks to Tesla’s brand and execution. As one investment manager quipped, Tesla’s biggest challenge now isn’t technology, its perception. Elon Musk’s political baggage is weighing on sales, brand loyalty, and investor confidence. The Tesla-Musk relationship has become a double-edged sword: Musk’s presence is deeply baked into Tesla’s market value – cutting ties could spook investors and erase billions – yet his behaviour increasingly repels key customers and invites distractions.
Moving forward, a central question is whether Tesla’s future success depends on Musk as much as its past did, or whether Tesla can (or must) become less reliant on his persona. It’s a delicate balance. Some argue that Musk’s visionary direction remains essential for Tesla to innovate and fend off competitors – that without him, Tesla could lose its Silicon Valley agility and cultural cachet. Others counter that Tesla’s core business is maturing and would benefit from more conventional leadership and a reset of its public image. For now, Musk himself seems convinced that Tesla needs him more than he needs Tesla, as evidenced by his confidence in pushing controversial agendas without fear of shareholder revolt. The Tesla board, despite occasional murmurs of concern, remains loyal to Musk and recently even affirmed a massive pay package to keep him “motivated” and focused.
In the end, Tesla’s challenge is to reap the benefits of Musk’s leadership while mitigating its downsides. This might mean Musk dialling back his inflammatory tweets and devoting more attention to Tesla’s day-to-day operations, or it could mean bolstering Tesla’s executive bench to prepare for a future when Musk isn’t at the wheel. The company’s ability to navigate intensifying competition, technological hurdles, and economic headwinds will be the true test of its resilience – and those are things that transcend any one individual, even Elon Musk. If Tesla can address its product gaps, maintain its innovation edge, and rebuild goodwill with sceptical consumers, it can stabilize and thrive regardless of political noise. But if Musk’s controversies continue to define the narrative, Tesla risks ceding its hard-won leadership in the EV revolution. As Tesla stands at this crossroads, one thing is clear: Elon Musk will remain the company’s biggest X-factor. His vision could yet guide Tesla to new heights in self-driving tech or robotics, just as easily as his impulses could steer it off course. The coming years will determine whether Tesla can continue to succeed because of Musk – or whether it will have to learn to succeed despite him.
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Written by Hippolyte Metzger-Otthoffer
Very interesting article!