Investors question whether Musk's X and DOGE ties are hurting Tesla

Zoom in: Musk has generated endless press coverage and social media attention as the owner of X and leader of the Trump administration's Department of Government Efficiency (DOGE).

• More than 300,000 media stories have been written about Musk and his DOGE activities since Jan. 1, according to Muck Rack data.
• Also since the start of the year, stories mentioning Musk and DOGE have had a readership of more than 387 million, with most of the spikes around legal proceedings and budget cut recommendations, per Memo data shared with Axios.

The big picture: CEOs across industries have become more proactive about communication — whether by embracing community engagement across social channels, modernizing earnings reports or conducting more personal, nontraditional media interviews.

State of play: Musk's political activities have triggered a partisan divide regarding consumers' views of Tesla.

• Republican favorability of Tesla hit an all-time high this month, while Democratic favorability dropped to an all-time low. This strongly suggests Musk's Trump ties are influencing consumer sentiment across party lines, per Morning Consult Intelligence data.

By the numbers: 49% of Americans hold negative views of Musk and 32% of U.S. buyers "would not consider" buying a Tesla, up from 27% a year ago, per Morning Consult.

• Repeat Tesla buyers in blue states dropped from 72% in 2023 to 65% in 2024, according to CNN.
• Meanwhile, Tesla sales are down 45% year over year in Europe and 15% year over year in China, per a recent Barron's report.

Reality check: Increased competition and macroeconomics could also be playing a part in the EV maker's tumbling sales numbers.

💭 Thought bubble from Axios' auto expert Joann Muller and energy reporter Ben Geman: Tesla has grown up and now faces the same trials as legacy automakers.

• What is unusual is bumper stickers on your customers' cars that say things like "Anti-Elon Tesla Club." One has to wonder what Musk is doing to protect Tesla's brand while he's busy attacking Washington's bureaucracy.

What they're saying: "I am completely convinced that the CEO's reputation goes along with the success of the company," says Paul Argenti, a communications professor at the Tuck School of Business at Dartmouth College. "A well-respected CEO allows you to have a stronger management team, a clear strategic vision for the organization and they significantly influence how the company is perceived. There's no question about that."

• "It's really important to understand just how critical that senior person is as the spokesperson for the organization, the person who is responsible for and associated with the strategy of the company, and the symbol for how the company is going to perform."

Yes, but: A company's brand equity shouldn't be solely tied to one individual executive, says Argenti.

• "You don't want the CEO to be the only source of brand equity for the company," he says. "That's a disaster, and we've seen that happen before with examples like Elon Musk, Steve Jobs or Martha Stewart."
• Tesla did not return Axios' request for comment.

What to watch: All CEOs are tasked with sharing their company's transformation stories, ensuring confidence and providing stability during these uncertain times.

• The power of strategic communications could come into play for those individual CEOs leading corporate turnarounds — such as Brian Niccol at Starbucks, Kelly Ortberg at Boeing and Gil West at Hertz.

More on Axios: Tesla sales fell in 2024, missing Elon Musk's EV growth target