Study: Musk Politics Linked to Tesla Sales Losses

A working paper by Yale economists published via NBER estimates Elon Musk’s increasingly partisan actions since acquiring Twitter/X in October 2022 — including roughly $300 million in political donations and a role leading Trump’s Department of Government Efficiency (DOGE) — likely reduced Tesla’s U.S. sales by about 1.0–1.26 million vehicles (roughly 67–83%) from October 2022–April 2025 and boosted rival EV and hybrid sales about 17–22%. Researchers say Democratic-leaning, environmentally minded buyers shifted to competitors, slowing California’s progress toward zero‑emission goals; the study attempts to isolate the “Musk partisan effect” from other headwinds such as an aging lineup and rising competition, though some analysts expressed skepticism while Yale argues Tesla had capacity to meet higher demand. Investors had warned Musk’s time and spending on X and political activity was distracting, and analysts trimmed 2025–26 earnings forecasts after a vague corporate outlook; Tesla’s stock also dipped amid margin and valuation concerns following a reported 37% drop in third‑quarter 2025 profits despite record deliveries and aggressive price cuts. Tesla continues incremental Full Self‑Driving updates and Musk has forecast driverless Robotaxis by the end of 2025, but FSD adoption and revenue are lagging, regulators and incidents have raised safety and transparency concerns, and rivals like Waymo have pressed for greater transparency around remote interventions. The paper quantifies a politically driven sales hit that benefited competitors and raises broader questions about CEO politicization, corporate focus, regulatory scrutiny, and the market dynamics shaping EV adoption.