How did Tesla go from the world’s fastest-growing automaker to a company struggling with slowing sales and shrinking market share? A team of Yale University researchers says the answer lies in CEO Elon Musk’s polarizing and partisan behavior.
Of course, Tesla faces headwinds such as aging models, increased competition, and a saturated customer base. But an analysis of county-level data shows its decline in demand is also tied to Musk’s increasingly politicized behavior. The study’s authors estimate that without the so-called “Musk partisan effect,” Tesla would have sold 1 million to 1.26 million more vehicles in recent years.
In the most recent quarter, Tesla Profits plummet A year-on-year increase of 37%. Revenue has declined for two consecutive quarters this year. (The latest quarter saw a rebound as tax credits fueled a buying boom.)
Researchers at Yale University believe Tesla’s decline stems largely from alienation from its traditional consumer base. Using vehicle registration data and county voting records from S&P Global, they found that Tesla’s customer base has long leaned toward Democrats and environmental consciousness.
That started to change in 2022, when Musk acquired X and eliminated its content moderation policy. This shift has deepened with his involvement in the 2024 US presidential election and subsequent appointment as head of the Trump administration’s Department of Government Effectiveness (DOGE). “Musk’s behavior angered his most loyal customer base,” the authors wrote.
This trend will only become more pronounced. Research shows that Musk’s partisan behavior caused Tesla to lose 67% to 83% of potential vehicle sales between October 2022 and April 2025. In the first quarter of 2025 alone, this number jumped to 150%.
Musk himself has acknowledged the backlash. During an earnings call in April, he said his role at DOGE had led to a “backlash” and announced plans to scale back his time at the agency to refocus on Tesla.
The fallout hasn’t even benefited Tesla’s competitors. Without Musk’s partisan behavior, sales of other electric cars and hybrid models would have fallen 17% to 22% over the past three years and would have fallen 25% by early 2025, the study found, suggesting his actions helped rival automakers.
Researchers noted that Musk’s controversy also had unintended policy consequences. California aims to have zero-emission vehicles make up 25% of new sales by 2026, 68% by 2030 and 100% by 2035, but progress has stalled. The study estimates that without Musk’s partisan influence, California would have seen 139,700 more electric vehicle sales in the first quarter of 2025. The reality is that California sold 28,000 fewer electric vehicles in the quarter.
This study highlights how influential CEO partisan behavior can be. ” the author concluded.
