Will Elon Musk’s Political Rantings Drive Tesla into the Ditch?

It's safe to say that more people know who the CEO of Tesla is than could tell you who runs General Motors, Ford, Toyota, Volkswagen, or Hyundai. Elon Musk may own a lot of companies, but it’s Tesla that made him a household name. Not since Henry Ford and his Model T has the head of a car company been so associated with its wares. For many of the brand’s fans, veneration of Elon has gone hand in hand with veneration of Tesla, but what happens if people start thinking Elon is not so swell? Will they sour on Tesla’s products? We may be about to find out.

After his high-profile purchase of Twitter for $44 billion, Musk assumed control of the social-media giant and has made an almost daily series of controversial moves. He reinstated formerly banned accounts, attacked Dr. Anthony Fauci, retweeted QAnon memes, and spouted off about "woke mind virus." Advocating for "free speech," Musk has gutted Twitter's content-moderation function, with the result being that hate speech has skyrocketed and advertisers have fled. Now, he says he'll be stepping down as Twitter CEO, but it remains to be seen whether he actually steps away.

Wall Street, which has bestowed upon Tesla a sky-high valuation that has helped make Musk the planet's richest man, has of late been tapping the brakes. Tesla's stock price has been cut by 55 percent so far this year, and the selloff has accelerated since Musk's takeover of Twitter.

Of course, many factors can affect the share price (among them, Musk himself selling nearly $40 billion worth of stock this year). But is Wall Street concerned specifically about Elon's behavior? Interviewed on CNBC's Squawk on the Street on Friday, Bernstein analyst Toni Sacconaghi said, "Absolutely, to some degree Musk may be disenfranchising potential customers." Sacconaghi, whose firm has a $150 price target on the stock, saw bigger headwinds facing the company.

Some investors are voicing similar concerns. Quoted in the Wall Street Journal, Gary Black with Future Fund LLC, which is a major Tesla shareholder, said, "The $TSLA brand has been negatively impacted by the Twitter drama. Where before EV buyers were proud to drive their Teslas to their friends or show off Teslas in their driveways, now the Twitter controversy is hurting Tesla's brand equity." On Twitter, Black expressed hope that Elon would see the error of his ways: "He will realize soon (if not already) that his polarizing political views are hurting customer perceptions of [Tesla] EVs."