Elon Musk has made a name for himself and Tesla by breaking the rules, but the billionaire’s latest comments on politics and a claim of sexual harassment against him that he said is untrue may hurt the brand in the eyes of some car owners and employees. Musk denied a report by Business Insider that he sexually harassed a flight attendant on a private jet in 2016, calling the person who made the claim a liar.
The previous day, the Tesla chief executive, in the midst of a contentious effort to buy Twitter Inc, said that he would now vote Republican instead of Democrat and called the Democrats a party of division and hate. Tesla also was cut this week from the widely followed S&P 500 ESG Index. Musk responded by calling such ratings around environmental, social and governance (ESG) issues a scam. He also questioned how the index could drop an electric car firm while adding oil and gas producers.
While Musk has made attention-grabbing headlines before once calling one critic a “pedo guy” on Twitter – the latest controversies again raise the question whether his outspokenness will tarnish his likeability. And, whether that will that hurt the carmaker’s sales. The left-leaning state is Tesla’s largest market, accounting for nearly 40% of the company’s U.S. retail registrations last year. Tesla sales in California were up almost 70% in the year.
#BoycottTesla was trending on Twitter on Friday and several people claimed they were cancelling their car orders. Many institutional investors may stand by Musk no matter what given the company’s strong performance, but that doesn’t mean some aren’t frustrated. One Tesla employee, voiced frustration that Musk’s efforts outside Tesla appeared to be hurting the carmaker’s stock. On Friday, Tesla shares dropped almost 9%, knocking about $66 billion off of Tesla’s stock market value. If discussion around water coolers at work focused on the sexual harassment claim against Musk rather than Tesla products, the end result could be “corrosive” for the Tesla brand. This was stated by John Smith, a former group vice president at GM who ran global product planning. Tesla and SpaceX employees also could become “a little bit rattled and angry” because of Musk’s anti-Democratic party comments. Jason Stomel, founder of tech talent agency Cadre gave away this comment. Some industry observers wondering whether Musk and Tesla would simply shake off these latest controversies, as they have in the past.
