What was interesting to you about this question?
I’m betting you’ve seen the bumper stickers appearing on Teslas: “I bought this car before I knew Elon was crazy.” Those bumper stickers, his role in DOGE, and all the headlines made us suspect Elon’s political activities might be having an impact on Tesla’s sales. Michael Jordan famously refused to endorse Harvey Gantt for Senate, explaining, “Republicans buy sneakers too.” Musk’s partisan activity was particularly unusual since it seemed to go against the preferences of his core audience, namely eco-conscious Democrats. So we wanted to see if we could measure the impact, if any, Musk has had on Tesla’s sales.
How did you figure out what sales might have been if Musk hadn’t become a partisan figure?
Disentangling the Musk effect is a hard problem. As of July, Tesla’s sales were down in 2025 and in 2024, two years in a row. This was in spite of a growing market for EVs. But there are many possible explanations. Tesla hasn’t come out with a new model in several years. (OK, there’s the Cybertruck, but that hasn’t lit the world on fire.) Ford, GM, Hyundai, and many others now have much more competitive EV offerings. How do we separate the Musk effect from all the other factors?
Our answer was to look at how Democrats and Republicans reacted differently to Musk’s activities. Until Musk bought Twitter in October 2022, Democrats were buying Teslas in increasing numbers, and then the trend reversed. But there was no reversal for Republicans. This is one way to tease out how voters in the two parties reacted differently to Musk’s activities. (Unfortunately for Tesla, any gain from increased Republican buyers was well more than offset by the loss of Democrat buyers.) Another window was to look at how Democrats differed from Republicans in the way they chose Teslas over other EVs and hybrids before and after the Twitter purchase. We would expect that increased competition or the lack of new models should impact Democrats and Republicans the same way, and there’s no reason why these impacts would start diverging after the Twitter purchase. But diverge they did. To the tune of a million-plus lost Tesla sales.
Can Tesla recover?
There’s little danger that Tesla is about to go under. Telsa’s sales were only modestly down. The real loss is what could have been—an extra million car sales. Instead of being a bit down, Telsa sales would have continued to grow and would be about double where they are now if only Musk hadn’t violated Michael Jordan’s dictum.
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