Tesla CEO and X owner Elon Musk stands with Republican presidential candidate and former U.S. President Donald Trump at a campaign rally in Butler, Pennsylvania, USA, on October 5, 2024 , that day Trump returned to the scene of the assassination attempt against him in July.
Brian Snyder | Reuters
as Tesla Prepare quarterly results On Wednesday, many investors were thinking about a big question: Donald Trump.
Previous forum Tesla used to solicit questions from investors online ahead of its earnings calls, and retail shareholders were flooded with dozens of inquiries about: Musk’s Politics, his inflammatory comments about X, and his efforts to return Trump to the White House.
“Elon Musk has the right to express his political views, but his public activism appears to contradict his responsibility as CEO to protect shareholder value,” one anonymous retail investor wrote on the forum. How does Tesla address this issue? Can it confirm that Musk’s actions will not harm sales or growth?”
This comment received 168 upvotes. Another question that received 527 votes was whether Tesla’s board was taking steps to ensure that Musk’s “political involvement does not harm Tesla’s core mission and protects shareholder value and brand integrity.”
Third-quarter results are expected after the close of regular trading.
Musk also serves as CEO of Tesla, the owner of defense contractor SpaceX and social network X. Boring Company, founder of Neuralink and Tunnel Ventures
In addition to Musk’s “17 jobs,” the world’s richest man also pitched Trump the idea that he should create a “Government Efficiency Commission” to cut spending and cut regulations. Trump promised to do just that and let Musk lead it effectively.
In an attempt to push the Republican candidate and former president over the finish line in a deadlocked race, Musk embarked on a speaking tour of Pennsylvania to promote voter registration. He called the state “key” to the election and said over the weekend he would randomize $1 million in rewards every day To registered voters who signed a pro-Trump PAC petition.
While Musk’s political views attract a lot of media attention, they are rarely discussed in company shareholder meetings or in reports by Wall Street analysts.
According to analyst reports compiled by FactSet, which excludes all sell-side firms, the topic of Trump and the election barely surfaced in the discussion.
The financial impact of Musk’s politics is difficult to quantify.
But at least one venture capitalist and Tesla bull — Gene Munster of Deepwater Asset Management — has tried.
Munster wrote in an Oct. 5 note that Musk’s heightened “political commentary” over the past four months “could have resulted in a 50,000-10,000-unit reduction in deliveries during the quarter.” Munster said this means that “if not for political dynamics,” the company’s U.S. sales would have increased by 4% and total sales would have increased by nearly 2%.
Tesla did not immediately respond to a request for comment.
Brand consultancy Interbrand conducted a 25-year study of the world’s best brands and found that Tesla’s brand value fell 9% this year. Tesla dropped to 12th place, behind automakers Toyota, Mercedes-Benz and BMW. All ranked in the top ten.
“Most automakers are grappling with the transition to electric vehicles, and although Tesla was born into this space, its change of focus has resulted in the market executing on it,” Interband Global CEO Gonzalo Brujo said in an email to CNBC. “Recent product launches have not helped, such as trucks, which have declined as competitors offer better cars. “
Interbrand’s top five brands are all technology companies that compete with Tesla for talent and sometimes product. Those names are apple, Microsoft, Amazon, Google and Samsung.
Tesla’s vehicle lineup is filled with models that have been around for years, including the still-popular Model 3 sedan and Model Y SUV. The company has been asking investors to focus on its plans for purpose-built robotaxis, self-driving software, humanoid robots and supercomputers rather than its core automotive business.
Brujo said Musk’s antics could distract from all that.
“A CEO or brand that aligns itself with any political element is taking a risk,” he wrote. “This can lead to polarization, and the business or brand could risk losing customers as a result.”
Tesla shares are down 14% for the year, thanks to an 18% drop in October. The Nasdaq is essentially flat this month but is up nearly 22% this year.
