Tesla: Anatomy of a Suicide

Just a decade ago, Tesla symbolized the energy transition: innovative, desirable, and aligned with the progressive values of its buyers. Today, the company is making headlines for its plummeting sales, the public embarrassment of its owners and the exodus of talent. What has happened and, above all, what future can be expected when its founder believes that salvation lies in converting it into a robotics firm?

The company’s image has plummeted since Elon Musk embraced the Trump administration’s agenda, polarizing public opinion as he went from aspirational icon to toxic asset. Professor Scott Galloway aptly describes the process as “one of the greatest brand destructions in history”: Tesla has fallen from eighth to 95th in the US corporate reputation rankings, dragged down by the confusion between the person and the company.

This symbolic erosion is, of course, reflected in the balance sheets. While EV sales grew by 28% in Europe in April, Tesla deliveries fell by 49% year-on-year according to the ACEA, with countries such as Spain (-36%) and Sweden (-81%) hitting multi-year lows. The paradox is that demand for EV has not fallen: it has simply migrated to competitors such as BYD, Volkswagen, KIA, and Hyundai, which offer comparable products without the reputational burden associated with Tesla’s founder.

The company went from being one of the top 10 most admired brands in the United States to 95th in just four years, a reputation in free fall. The trigger, obviously, was Elon Musk’s hyper-identification with the Trump administration and his unpopular “Department of Government Efficiency (DOGE),” which symbolized everything that previous buyers of his vehicles hated.

The crisis is also affecting owners. In an article published by The Guardian, a British driver describes how the “dream car” he bought for his retirement has become a “living nightmare”: selling it is unfeasible because the second-hand market now heavily penalizes the brand and because, moreover, “nobody wants to be seen driving a Tesla”. Meanwhile, in Adelaide, Australia, 95% of neighborhood protests calling for a ban on the sale of municipal land to Tesla were motivated not by environmental concerns, but simply by “anti-Musk” sentiment.

The reputational damage is exacerbating the real sales figures. Global deliveries in the first quarter of this year fell by 13% while the rest of the market grew, and in California, the brand’s historic stronghold, registrations fell by 15% against a 7.3% increase for EVs as a whole. There has been a 250% increase in customers trading in their Tesla for another brand, while price cuts have squeezed margins to four-year lows. In a March Yahoo/YouGov poll, 67% of would-be buyers ruled out a Tesla, with 37% attributing this directly to Musk. The pattern repeats itself: the rest of the electric market is progressing while Tesla is falling behind, a symptom of a de facto boycott rather than temporary demand problems.

Faced with the brutal collapse of his automotive business, Musk promises to pivot the brand toward robotics: robotaxis, humanoids and “tens of billions” of domestic robots. However, the historical pattern of his announcements invites skepticism. Nineteen years of broken promises, from the Hyperloop to level 4 autonomous driving “next year,” to the “million robotaxis” that never arrived. The next milestone, a pilot of 10–20 driverless Model Ys in Austin, already faces numerous technical and regulatory problems; independent tests have shown safety failures as basic as running a red light.

The brand’s elasticity has disappeared: the shift from “sustainable automotive” to “robotic intelligence” requires regulatory and social trust, exactly what Musk tends to dissipate. In short, any venture associated with Tesla’s founder is toxic. In addition, the unitary economy is highly dubious: even assuming impressive technical success, the margins of a vertically integrated robotaxi service are much lower than those of selling high-margin hardware such as the Model S or X, and the forced transition involves slaughtering the current cash cow before the next one produces milk.

Even if the technology matures, the shift would not solve the central problem: trust. Regulators who must authorize fleets of driverless vehicles and consumers who would pay to ride in them carry over the same negative perception that currently weighs on the brand’s cars to the new service. At the same time, the competitive space is crowded: Waymo operates in several metropolitan areas, Zoox is back on the streets under strict supervision, and in humanoid robots, Boston Dynamics (Hyundai), 1X, Figure, Agility, and Toyota are attracting talent and investment without the burden of a toxic founder. Turning the company into a robotics venture might have made sense if Musk’s credibility were still intact. But today, the evidence suggests otherwise: customers and regulators attribute the same probability to his promises as they did to the 2016 “Mars demo”.

In the medium term, three plausible scenarios can be drawn. The most likely is that Musk remains in control and the Tesla robotaxi is only deployed on a limited basis in a few cities in the United States, Tesla’s EV global share would fall below 6% by 2030, and the stock would end up valued at the usual multiples for the automotive industry, rather than the technology industry, as was previously the case. Only a change in leadership that depoliticizes the brand and restores communication with consumers could stabilize it at around 10% of the market, but this would be extremely difficult, requiring a cultural shift that Musk has shown no intention of undertaking. On the negative side, continued polarization and further robotaxi regulatory delays would sink the share below 3%, forcing the spin-off of the energy and AI divisions to contain losses.

Now, not even Musk’s sudden departure from the Department of Government Efficiency (DOGE), announced as an “image rehabilitation” tour to devote “maniac time” back to SpaceX and, above all, Tesla, will manage to reverse the rift with its original customer base: after a year and a half of playing Trump-style austerity czar, the brand’s reputation has plummeted and the company’s stores are seeing protests and poor sales, according to its own spokespeople. Twelve pension funds, fed up with a CEO who “wears too many hats, including red ones,” have just demanded in a public letter that he put in a 40-hour a week shift at the company and stop distracting himself with politics, reminding him that the stock has lost a quarter of its value since he embraced the MAGA agenda. The gesture comes too late: the former pro-sustainability base will not forgive him for turning the brand into a symbol of polarization, and the new ultra-conservative audience that applauds his harangues are never going to buy an EV.

Tesla will always have a place in the history books of innovation: it pioneered large-scale electrification and forced century-old giants to get their act together, literally and metaphorically. But that advantage has already been amortized: competitors now make better products at more affordable prices, and the goodwill that set Tesla apart has evaporated. The company’s legacy will not guarantee its survival.

When corporate identity becomes so confused with the figure of the founder, reputation becomes as volatile as Musk’s X account. And unlike a battery, market confidence cannot be quickly recharged. In terms of innovation, Tesla’s legacy will remain. But in terms of business, all signs point to the pioneer being reduced to a pathetic case study of how a personality-driven strategy can squander what was once a monumental first-mover advantage.