Elon Musk has made a critical strategic error by aligning with political forces whose supporters have little interest in electric vehicles, creating “one of the greatest brand destructions” in business history, according to marketing professor Scott Galloway.
On Friday’s episode of the Pivot podcast, Galloway explained how Musk’s role leading the Department of Government Efficiency (DOGE) in the Trump administration has severely damaged Tesla’s brand reputation and market position.
“Three-quarters of Republicans would never consider buying an EV. So he’s cozied up to the people who aren’t interested in EVs,” Galloway stated, highlighting the fundamental disconnect between Musk’s political activities and Tesla’s business interests.
The consequences have been severe. Tesla’s reputation has plummeted from eighth place in 2021 to 95th today, while sales across Europe show dramatic declines: 81% in Sweden, 74% in the Netherlands, 66% in Denmark, 59% in France, 50% in Switzerland, and 33% in Portugal.
These market losses have created opportunities for competitors. Chinese manufacturer BYD has overtaken Tesla in European sales for the first time in April, according to automotive intelligence firm Jato Dynamics, marking a significant shift in the competitive landscape.
Musk’s political involvement extends beyond his DOGE role. He has increasingly commented on European political issues through his social media platform X, including Germany’s federal election and UK controversies, further alienating consumers in key markets.
“This has arguably been one of the greatest brand destructions,” Galloway told co-host Kara Swisher. “Tesla was a great brand. He’s alienated his core demographic.”
Musk’s DOGE appointment followed his political action committee’s $200 million donation to Trump’s successful presidential campaign. The department’s claimed $160 billion in cuts may actually cost taxpayers approximately $135 billion according to the nonpartisan Partnership for Public Service.
With Tesla reporting a 71% profit decline in April, Musk recently announced plans to scale back his DOGE involvement, stating his work getting the government’s “financial house in order is mostly done” and that his “time allocation to Doge will drop significantly.”