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In the US, many on the left are completely turning away from Tesla due to Elon Musk’s extreme right-wing politics. But there are also many Donald Trump supporters who may be turning to Tesla. In Europe, a large portion of the population is again turning against Tesla due to Musk’s support for far-right and fascist parties in major European nations. However, there are clearly also supporters of those parties there that may be turned on to Tesla from it all. From what I see and assume, it’s still a significant net negative for Tesla sales in the US and Europe, but we’ll see how things trend. However, there’s one more big market — the second biggest for Tesla (only behind the US). That’s China.
Elon Musk never says anything negative about Xi Jinping or the Communist Party of China. He throws around wild assertions about “communists” in the US, but his “love of free speech” goes out the window when it comes to China. I wonder why. Nonetheless, as we’ve been saying since Musk tied his future to Trump’s diaper, Tesla faces great risk in China. One wrong step and — boom — you’re the next Jack Ma. Winnie-the-Pooh is censored in China because some people thought Xi Jinping looked like him. (I have a hard time understanding the problem there, since Winnie-the-Pooh is so lovable and endearing, but it is what it is.) Some have presumed that any association with Donald Trump is bound to bite Musk and Tesla in the a** since Trump is consistently to anti-China. But it doesn’t seem like that has had any notable immediate effect. However, he could be on thin ice, especially paying attention to some recent comments out of China.
Cui Dongshu, CEO of the China Passenger Car Association (CPCA), recently provided some advice:
“As a successful businessman, one should be embracing 100% of the market: treat everyone nicely, and everyone will be nice in return. But if you look at it in terms of voting, then half of voters will be friendly to you and half of them won’t be. This is the unavoidable risk that’s come after he [Elon Musk] got his personal glory.”
Or perhaps we could say that’s a critique of Musk’s actions. He’s pointing out that Musk has already let personal glory do damage to the Tesla brand.
In terms of the US, while Tesla buyers have been Democrats more than Republicans, I think the split is not as large as many people assume. I know that, historically, the company has had a lot of buyers from both parties. So, even with Trump’s recent endorsement, I think that Musk’s in-your-face politics has shifted the potential Tesla buyer pool from a majority of the population to … well, a smaller majority of the population. Of course, a large portion of the population isn’t going to consider a Tesla yet for a variety of reasons, but I think it’s just a portion of Democrat voters who have sworn off buying a Tesla — perhaps around 40% of Democratic voters (I’m probably being ambitious there), or around 10% of the overall population (remember, only about half of the population votes). Previously, I assume a much smaller portion of Republican voters (maybe 20%, as a wild guess) had sworn off buying a Tesla.
Anyway, as Cui Dongshu said, it’s just bad business to alienate a large portion of your potential customer base.
But was Dongshu really focused on US ramifications and Tesla sales? I assume there’s a bit of a message in here concerning the Chinese market. If we’re really going into a heated trade/tariff war with China, that’s not going to be popular with Chinese leaders, or with Chinese consumers if those Chinese leaders speak up about it. Additionally, as I said before, Musk has previously made disparaging comments about supposed “communists” in the Democratic Party. I know it’s one of Musk’s natural talents, but perhaps he should be careful about what he says even in a US context about such matters.
And there’s another matter a reader just raised. The COVID-19 story is not over. “Missouri Attorney General Andrew Bailey secured a historic $24 billion judgment against the Chinese Communist Party for unleashing the COVID-19 pandemic — six times more than the previous largest judgment in Missouri history,” Bailey writes. “This is a landmark victory for Missouri and the United States in the fight to hold China accountable for unleashing COVID-19 on the world,”said Attorney General Bailey. “China refused to show up to court, but that doesn’t mean they get away with causing untold suffering and economic devastation. We intend to collect every penny by seizing Chinese-owned assets, including Missouri farmland.” Musk catapulted into politics in response to COVID-19 lockdowns. Conspiracy theories about China and COVID-19 are abundant on the right. There’s certainly a possibility Musk could wade into this pool. And there could be repercussions if he does.
So far this year, Tesla sales in China have not been good. January plus February sales figures were below January plus February sales figures in 2024 — down about 50%. The new Tesla Model Y is supposed to save the day and boost sales into the stratosphere again, and initial reservation tallies have been enormous. But there’s murmuring now that the reservation list my be thinning much faster than expected — that many of those reservations may get refunded.
I assume that China is a bit like the US — one big, souring controversy can put a sudden dent in consumer interest in a product. One word from Xi Jinping and, well, many people wouldn’t be caught buying a Tesla. Elon Musk must walk on eggshells here. But even without that, Chinese people paying attention to US politics may not be a fan of Musk’s close work with Trump. There’s no country Trump has vilified more than China. I would think that would turn some Chinese people off from cars from Trump’s new best friend.
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