Elon Musk’s involvement with the Trump administration has caused significant backlash, with Tesla owners trading in their electric vehicles at unprecedented rates. According to Edmunds, March saw the highest ever share of Tesla trade-ins, with owners opting for new or used cars from other brands. This surge in trade-ins comes as Musk, who is the CEO of Tesla, has been instrumental in slashing the federal workforce and government spending as part of the Department of Government Efficiency (DOGE).
Before assuming leadership of DOGE, Musk spent a substantial $290 million to support President Donald Trump’s re-election bid. However, investors who initially snapped up Tesla shares after Trump’s victory have since been selling, resulting in a 42% decline in the stock’s price this year.
The backlash against Musk and Tesla has been intense, with protests targeting Tesla facilities across the U.S. and beyond. Vandalism and arson have also been reported, with Tesla stores, vehicles, and charging stations being targeted. Furthermore, Tesla is facing increased competition from other electric vehicle (EV) makers, with Ford, Chevrolet, and Volkswagen gaining market share.
Jessica Caldwell, head of insights at Edmunds, told NBC, “Shifts in Tesla consumer sentiment could create an opportunity for legacy automakers and EV startups to gain ground.” Caldwell notes that as Tesla’s brand loyalty and interest wane, other manufacturers offering competitive pricing, new technology, or simply less controversy could capture defecting Tesla owners and first-time EV buyers.
The Tesla brand is inextricably linked to Musk, with Edmunds surveys finding that only 2% of car shoppers in the U.S. were unfamiliar with him in August 2024. However, even before Musk began heading up DOGE, Tesla’s brand was struggling. Its brand value fell by 26%, or approximately $15 billion, in 2024, marking a second consecutive annual decline, according to Brand Finance.
Edmunds data reveals that shopping for new Tesla models on its platform dropped to its lowest level last month since October 2022, after peaking in November. While many car shoppers trade in their Tesla EVs for newer models, Edmunds data does not account for these transactions.
