Musk's politics lost Tesla 1 million car sales

 

From Electrek

We’ve been talking about the impact of Elon Musk’s venture into politics on the Tesla brand for years, but now a new study from the National Bureau of Economic Research (NBER) is putting some staggering numbers to it.

According to a new working paper, Musk’s “polarizing and partisan actions” have directly cost Tesla over a million vehicle sales in the US alone.

The study, titled “The Musk Partisan Effect on Tesla Sales,” argues that without this effect, Tesla’s sales would have been 67% to 83% higher between October 2022 and April 2025. That’s an absolutely massive number, and it suggests Tesla’s recent sales slump isn’t just about “increased competition” or “pent-up demand” being satisfied.

It’s about the brand.

The researchers from Yale and NBER didn’t just run a poll. They dug into county-level, monthly new vehicle registration data for all EVs and hybrids from March 2020 to April 2025.

They used a “difference-in-differences” analysis. In simple terms, they tracked how sales trends changed in heavily Democratic-leaning counties versus heavily Republican-leaning counties. The “treatment” event that broke the trend? Elon Musk’s acquisition of Twitter in October 2022.

Here’s what the data shows:

Before Oct. 2022: Counties with more Democrats showed an increasing preference for Teslas compared to Republican counties. This makes sense, as we know EV adoption has historically been higher among liberal-leaning buyers.

After Oct. 2022: The trend dramatically reverses. As Musk’s political activities—including “relaxed content moderating of far-right and extremist voices” and massive campaign contributions—ramped up, Democratic-leaning counties began “shifting away from Tesla purchases”.

The study is blunt, noting Musk’s actions “antagonized his most loyal customer base”.

The paper runs two different models to quantify the damage, and the results are “remarkably similar”.

Aggregated from October 2022 through April 2025, the “Musk partisan effect” cost Tesla between 1.0 and 1.26 million vehicle sales.

Again, that’s in the US alone. Tesla’s sales in Europe have also been crashing over the last 2 years. Some of that has been attributed to Musk’s political activism, but Tesla is also facing tougher competition in Europe, where more EV models are available due to fewer protectionist rules.