Elon Musk just cost Tesla billions in US: Here's how

Elon Musk’s outspoken political stance appears to have backfired, and this time, hitting his own company, Tesla.

A recent study by researchers from Yale University and the National Bureau of Economic Research (NBER) has found that the tech billionaire’s polarising political image, particularly his alignment with conservative figures and ties to Donald Trump’s administration, has significantly damaged Tesla’s sales in the US.

According to the study, Tesla’s US sales could have been 67% to 83% higher between October 2022 and April 2025 if not for what the researchers call the “Musk party effect.”

That translates to roughly one to 1.26 million fewer vehicles sold, amounting to billions in potential losses.

The research also shows that Musk’s political behaviour drove environmentally conscious Democratic buyers, once Tesla’s most loyal base, toward rival electric and hybrid brands, boosting competitors’ sales by up to 22%.

Researchers have linked this shift to Musk’s donations of nearly $300 million to Republican candidates and his role in Trump’s Department of Government Efficiency (DOGE).

Notably, Tesla chair Robyn Denholm recently admitted in an interview that Musk’s growing political involvement had affected the company’s perception.

In California— Tesla’s biggest US market — registrations dropped 9.4% last quarter, with its market share slipping to 46.2%.

While Tesla’s pivot to AI and robotics projects like the robotaxi and Optimus humanoid robot helped slightly improve public sentiment, the damage to its core customer base remains visible.