(CTN News) – Upon Tesla CEO Elon Musk’s announcement of his intention to concentrate his efforts on the electric vehicle company, investors expressed a collective sense of relief.

Conversely, this assurance did not entirely mitigate apprehensions that Musk’s shift to the right had irrevocably harmed the company’s brand.

Due to his role as a Trump adviser and his endorsement of right-wing parties in Europe, the billionaire has faced significant criticism, including protests and vandalism of Tesla stores.

“His time is valuable, and Tesla requires his focus.”

Stated Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management and a prominent investor. “I believe Tesla requires his attention.” “I believe Tesla requires his focus.”

Conversely, individuals persist in harboring an unfavorable perception of the brand. Your proposed solution is currently unclear to me.

Although the market capitalization of the world’s most valuable vehicle manufacturer has diminished by over $500 billion, its share value has declined by around 50% since peaking in December of this year.

This is mostly due to concerns that any harm to the brand may adversely impact sales for the entire second year.

Post-election, Tesla’s stock fell after hitting an all-time high.

The company’s present market valuation is over $766 billion, and it is anticipated to rise by over $50 billion if the enhancements persist. The valuation of Tesla shares was about 89 times anticipated earnings, significantly exceeding the projections of competitors like Ford Motor, General Motors, and the Magnificent Seven concerning their profits.

Experts warned that Tesla would face significant challenges in recovery, especially due to a political issue adversely affecting the company’s brand. While some investors lauded Musk’s decision to dedicate additional time to Tesla, others warned that the company has a protracted path to recovery.

Sue Benson, the CEO and founder of The Behaviours Agency, a marketing firm, asserts that the decline has officially commenced. Benson remarked in an interview that Musk might pivot his political career and devote his entire focus to Tesla, however the decline has already commenced.

No product can remedy this situation, and no duration spent in headquarters can alter the prevailing view of Musk; it may exacerbate matters, as it is far too late to dissociate the individual from the entity.

Several Tesla consumers, who had previously endorsed the company’s mission to address climate change, have become discontented due to Musk’s endorsement of Trump and his affiliation with right-wing organizations.

Several analysts believe that accelerating the adoption of electric vehicles (EVs) in areas with a more conservative legislative climate could offset the sales decline experienced in California and other markets.

Tesla is approaching a phase where the company’s subsequent growth will hinge on the appeal and affordability of its products and services to consumers.

Brand perception issues are growing in importance.

Although the corporation has confirmed its intention to deliver a low-cost model in early 2025, it has nonetheless cautioned that the production ramp may require more time than expected.

When Tesla publishes its financial update for the second quarter, expected in July, the firm will declare a re-assessment of its year-end delivery forecast due to changing regulations around foreign trade.

Although Tesla is less susceptible to adverse effects of global tariffs compared to traditional automakers, the company believes that such tariffs will significantly impact the burgeoning energy storage market, which relies on battery cells manufactured in China.

Musk asserted that he had advocated for reduced tariffs, although the final decision rests with American President Donald Trump. “I expect there will likely be unforeseen challenges this year,” he stated to the press.

Vaibhav Taneja, Tesla’s Chief Financial Officer, stated, “The detrimental effects of vandalism and unwarranted animosity towards our brand and personnel have influenced certain markets.”

Tesla further noted that “shifting political sentiment could significantly affect demand for our products in the short term.”

SOURCE: DN