Elon Musk’s X Drama Hurts Tesla Where It Matters Most
During a 1990 Senate race in his home state of North Carolina, Michael Jordan was asked why he didn't endorse the African-American Democratic candidate. He was still explaining his response — “Republicans buy sneakers too” — to reporters 30 years later, saying he wasn't an activist in the mold of Muhammad Ali: “I thought of myself as a basketball player.”
Elon Musk may think of himself as an entrepreneur, and a celebrity one at that, but he wears many hats with enthusiasm, including as an activist in the cause of, as he sees it, free speech. His latest outrage, endorsing an antisemitic comment on X, has drawn a backlash, including companies pulling ads from the social media platform. But there may also be repercussions for the main source of his fame and wealth: Tesla Inc.
Tesla has, of course, glided through many of Musk's prior controversies, including those with direct legal implications (“funding secured.”) What is different today is that the market for electric vehicle has become sharply more competitive, as Tesla's own sinking margins and missed sales estimates show, with price cuts indicating buyers are thinking twice about EVs. Musk's company is also gambling on a long-delayed new model, the Cybertruck, whose price and specs remain a mystery 10 days out from launch.Observing a spate of headlines about Americans falling out of love with electric vehicles, Alexander Edwards, chief executive of Strategic Vision, a consumer behavior consultancy, says: “There never has been a love affair with the EV.” He's right about that: Even as EV sales in the US increased by about 50% in the third quarter, they accounted for only 7.9% of new vehicle sales overall.
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