Tesla’s investors breathed relieved after executive director Elon Musk announced that he would focus his attention on the electric car manufacturer again, but that promise did not completely dissipate the concerns that his turn to the right had irrevocably damaged the company’s brand.
The actions of the automobile manufacturer rose almost 8% this Wednesday after Musk announced that he would reduce his work for US President Donald Trump to one or two days per week from next month, after Tesla registered a 71% drop in his net income and a sharp fall in the income of the automotive sector.
The multimillionaire work as a Trump advisor and his support for the right -wing policy in Europe generated a generalized opposition, including protests and vandalism in Tesla’s exhibition rooms.
“His time is very valuable and I think Tesla needs your attention,” said Ross Gerber, executive director of Gerber Kawasaki Wealth and Investment Management and outstanding investor. “But that does not change the fact that people don’t want the Tesla brand. I don’t know how to solve it.”
The actions of the most valuable car manufacturer in the world have lost approximately half of its value since they reached a historical maximum in December, reducing their stock market capitalization by more than 500,000 million dollars, largely because of the concern that the damage to the brand can harm sales for the second consecutive year.
It is expected to add more than $ 50,000 million to its market assessment of 766,000 million dollars, if the profits are maintained. The actions of Tesla traded approximately 89 times the expectations of benefits, much more than those of manufacturers such as Ford Motor, General Motors and Magnificent Seven.
While some investors applauded Musk spending more time to Tesla, experts warned that the brand faces a long way to recovery, especially because political controversy continues to affect its image.
“Musk could turn his political career and dedicate 100% of his time to Tesla, but the decline is already present,” said Sue Benson, executive director and founder of The Behaviours Agency, a marketing firm.
No product can solve this, and no amount of time spent in the Tesla offices will change the new perception that many have from Musk; In fact, things could get worse, since it is too late to separate man from the machine.
Musk’s support to Trump and his affiliation to right -wing causes distanced a consumer segment that was previously aligned with Tesla’s climatic mission.
Read more: Musk says that he will significantly reduce the time in Doge and press Trump to reduce tariffs
Not only the image, Tesla still has to face tariffs
Some analysts suggested that if the adoption of electric vehicles is accelerated in more conservative states, it could compensate for the fall of sales in California and other markets.
Brand perception problems became more policy for Tesla, which is entering a phase where the attractiveness for the consumer and affordability are essential for their next growth stage.
The company reaffirmed its plans to launch an affordable model in early 2025, but warned that the increase in production could be slower than expected.
Tesla announced that he will review his delivery forecast for the whole year, amid changes in global commercial policies, in the update of the second quarter, scheduled for July.
While Tesla is less likely to be affected by global tariffs that traditional car manufacturers are still expected to be expected in the energy storage business, which is in rapid growth and uses China’s battery cells.
Musk said he advocated lower tariffs, but that the final decision falls to Trump. “I anticipate that this year there will probably be some unexpected shocks,” he said.
“The negative impact of vandalism and unjustified hostility towards our brand and our staff had an impact on certain markets,” said Vaibhav Taneja, Financial Director of Tesla.
Tesla also pointed out that “the change in political feeling could have a significant impact on the demand for our short -term products.”
“Until the brand is distanced from the political ballast he has acquired, the specific percentage of Musk’s renewed attention could be irrelevant,” said Gabor Schreier, creative director of Saffron Brand Consultants.
With Reuters information
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