Tesla CEO and X owner Elon Musk stands with Republican US presidential candidate Donald Trump during a campaign rally on the day Trump returns to the site of the July assassination attempt against him in Butler, Pennsylvania, US, 5 October 2024.
Brian Snyder | Reuters
like Tesla prepares for quarterly results on Wednesday, many investors have one big issue on their minds: Donald Trump.
In a forum that Tesla uses to solicit investor questions online before its earnings calls, dozens of questions poured in from retail shareholders about Elon Musk’s politics, his inflammatory X comment and his efforts to bring back Trump at the White House.
“Elon Musk has the right to express his political views, but his public activism seems at odds with his responsibility as CEO to protect shareholder value,” wrote an anonymous retail investor on the forum. “How does Tesla handle this and can it confirm that Musk’s actions are not hurting sales or growth?”
The comment received 168 upvotes. Another question, which received 527 votes in favor, asked if Tesla’s board is doing anything to ensure that “Musk’s political engagement does not undermine Tesla’s core mission and protect shareholder value and brand integrity.”
Third quarter results are scheduled to be released after the close of regular trading on Wednesday.
Musk, the world’s richest man, is both CEO of Tesla and defense contractor SpaceX and owner of social network X. He also founded a company, xAI, in 2023 to develop artificial intelligence products outside of Tesla, and he is the founder of the brain computer interface company Neuralink and the tunneling company The Boring Co.
Adding to what Musk has called his “17 jobs,” he has also floated the idea to Trump that he should form a “government efficiency commission” to cut costs and reduce regulations. Trump has promised to do it and let Musk lead it effectively.
In his bid to push the Republican nominee and former president across the finish line in a deadlocked race, Musk began a speaking tour in Pennsylvania to drive voter registration. He called the state a “key takeaway” in this election, and on Saturday said he would randomly award $1 million a day to registered voters who sign a petition for his pro-Trump PAC.
While Musk has drawn a lot of media attention for his political views, they have rarely been discussed at company shareholder meetings or in Wall Street analyst notes.
According to analyst notes compiled by FactSet, which does not include all sell-side firms, the topic of Trump and the election has been largely absent from the discussion.
The financial impact of Musk’s policy may be difficult to measure.
But at least one venture capitalist and Tesla bull, Gene Munster of Deepwater Asset Management, has given it a shot.
Munster wrote in a note on Oct. 5 that Musk’s increased “political commentary” in the past four months “may have reduced shipments by 5-10k during the quarter.” Munster said that means the company’s US figures would have been 4% higher and the total numbers almost 2% higher “if not for political dynamics”.
Tesla did not immediately respond to a request for comment.
Brand consultancy Interbrand, which has conducted a study of the best global brands for 25 years, found that Tesla’s brand value fell 9% this year. Tesla fell in the ranking to 12th place, behind automakers Toyota, Mercedes Benz and BMW. which all cracked the top 10.
“Most carmakers are grappling with the transition to EVs, and although Tesla was born into that territory, its shift focus is causing confusion in the market about the strategies it is executing,” Interband Global CEO Gonzalo Brujo said in an email to CNBC. “This hasn’t been helped by recent introductions like the truck that failed as competitors offer better cars.”
The top five brands ranked by Interbrand were all tech companies that compete with Tesla for talent and, in some cases, products: Apple, Microsoft, Amazon, Google AND Samsung.
Tesla’s vehicle lineup is full of models that have been around for years, including the still-popular Model 3 sedan and Model Y SUV. And the company has urged investors to focus on its plans for dedicated robotics, driverless software, humanoid robots and supercomputers, rather than its core automotive business.
Brujo said Musk’s antics could represent a major distraction from all of this.
“A CEO or brand that aligns itself with anything political is taking a risk,” he wrote. “It can be polarizing and the business or brand could risk losing customers as a result.”
Tesla shares are down 14% for the year following an 18% slide in October. The Nasdaq is almost flat for the month and is up almost 22% this year.
WATCH: Musk gives $75 million to pro-Trump PAC
