Elon Musk might just be at the heart of why Tesla has dropped value in the last year, as the public persona of the company’s CEO appears to have had a negative effect beyond his own reputation.
While Elon Musk has remained a prominent figure for over a decade now, he’s catapulted himself into the spotlight in the past year especially. Not only has he become by far the richest individual in the world with a net worth that nearly doubles the next highest on the list, but he has also made a major push into US politics.
He has closely allied himself with President Donald Trump, and has been rewarded with a position at the head of the new Department of Government Efficiency (DOGE), but these actions haven’t exactly nurtured his image worldwide.
There have been multiple exoduses from Twitter, now X, since Musk purchased it for $44,000,000,000 back in 2022 – most of which are due to the billionaire’s increasingly far right views that populate the platform.
However, while the year-on-year decline at the start of 2024 was only around $7.9 billion, this figure nearly doubles to $15.3 billion if you compare the start of 2024 to 2025.
This also marks a two-year decline of around $23.2 billion, which is worrying for the electric vehicle manufacturer despite remaining one of the most valuable companies in the entire world.
While some might point towards repeated recalls or the disappointing Cybertruck release for this decline, experts indicate that CEO Elon Musk is actually at the heart of why Tesla’s value has dropped so significantly.
Recent actions like an alleged Nazi gesture and targeted harassments of foreign government officials are among many of the actions that have soured both Musk and Tesla’s image globally, and it appears to be stopping many from buying the company’s cars.
Brand Finance CEO David Haigh explains in reference to Musk’s current reputation: “There are people who think he’s wonderful, but many that don’t. If you are buying electric vehicles, his persona is highly likely to impact your view of whether or not you want to buy one of his company’s cars, but that’s only one of many factors.”
There’s certainly no shortage of EV options on the market now, and even some of the biggest tech creators are making the jump to non-Tesla brands.
Based on a survey by Brand Finance, which collected data on Tesla from over 16,000 participants, the company’s ‘consideration’ score – measuring how likely people would be to buy from a brand – dropped by 16% down to just 21% between 2024 and 2025.
Musk’s political actions are reportedly a big reason why many aren’t so keen on buying their own Tesla (Justin Sullivan/Getty Images)
The ‘recommendation’ score in the US alone dropped from 8.2/10 to 4.3/10, but the ‘loyalty’ score – measuring how likely current owners are to keep driving their Tesla for the next 12 months – remained high at 90%.
This could also be why Tesla reported a sales decline last year for the first time in nearly a decade, as many argue that Musk’s politics are alienating the userbase most likely to invest in electric vehicles.
However, Trump’s administration could likely prove fruitful for the company as Musk’s close ties could lead to relaxed regulation, and the markets seem to suggest this too with a dramatic market cap increase following the election results last November.
The race to be the biggest electric vehicle manufacturer continues, and while the Chinese-based BYD takes the crown, Tesla is the biggest in the USA.
As we’ve seen the once gas-guzzling Jaguar vow to go all-electric, it looks like people are finally taking the EV industry seriously.
Tesla continues to innovate, and although Elon Musk knocked a jaw-dropping $15 billion off his net worth with the disappointing October 2024 reveal of the Tesla Cybercab and Robovan, its stock has climbed over the years.
Europe’s largest pension fund has sold its shares in Tesla (Pool / Pool / Getty)
Although navigating the stock market is never easy, Bloomberg reports that Europe’s largest pension fund sold its whopping €571 million ($585 million) stake in Tesla Inc. in 2024. The sordid saga stems back to an incident in 2018 when Tesla shareholders approved a record-breaking pay packet for Mr. Musk. Back then, Musk was posed to receive a lucrative pay packet that would allow him to buy a maximum of 304 shares at just $23.34.
Tesla has been on an upward trajectory, with it hitting an all-time stock price of $479.86 on December 17, 2024. They’ve dipped slightly since then, but at the time of writing, Tesla shares are still worth an impressive $396.
A spokesperson for Stichting Pensioenfonds ABP said, “We had a problem,” when referring to Musk’s pay package. It apparently considered costs, return, and its own responsible investment requirements before it made the decision to sell.
When it comes to Musk’s withheld pay package, one shareholder sued Tesla and Musk in 2018, claiming that Musk has influenced the board – especially his brother, Kimbal Musk. Jumping forward to January 2024, a Delaware judge sided with the shareholder and struck down Musk’s compensation package. Although the compensation originally started at just $2.6 billion, it ballooned to $56 billion by the time the judge ruled.
In December 2024, it was withheld a second time, with Kathaleen St. J. McCormick saying the Tesla board was ‘influenced’ by Musk. She said the agreement was “beyond the bounds of reasonable judgment.”
Musk’s political leanings aren’t said to have influenced the decision (Samuel Corum / Stringer / Musk)
The case rumbles on, while Stichting Pensioenfonds ABP selling its massive share is another sting.
Still, with Tesla being worth around $1.27 trillion and its stock rising by 74% in the past year, it’s not exactly struggling.
Some might think that Musk’s new political allegiance with Donald Trump could have something to do with the stock sales, although a Stichting Pensioenfonds ABP spokesperson told Fortune this isn’t the case. The company’s portfolio apparently shifted before October, which is when Musk noticeably threw his significant social media weight behind European politics and aligned further with similar values to Trump.
Despite $585 million being a massive amount, it only represented around one-tenth of ABP’s total investment in U.S. megacorps. In contrast, the European fund had around €5.6 billion invested in Nvidia at the end of September, €6.0 billion in Microsoft, and €6.3 billion in Apple.
As for Musk’s pay packet, Stichting Pensioenfonds ABP reiterated to Fortune, “This is by no means the only reason,” it sold its shares.
Elon Musk has appealed a record-breaking $56 billion pay package after it was rejected a second time.
Earlier this week, the world’s richest man filed an appeal with the Delaware Supreme Court after the case was rejected by a state judge for the second time.
Tesla shareholders had initially voted in approval of Musk’s pay package back in 2018.
Elon Musk has appealed the judge’s decision (Anna Moneymaker/Getty Images)
The deal gave him the ability to buy a maximum of 304 shares in the firm for $23.34 as long as he met certain performance goals.
Now, Tesla shares trade at a rate of $393 each.
Despite a majority of shareholders approving the pay deal, one investor filed a suit which claimed that the board had been misleading and that the pay package was unfair.
Delaware Chancellor Kathaleen McCormick has since rejected Musk’s bid for the pay deal, stating that Tesla’s ‘unprecedented theories go against multiple strains of settled law’.
Now, Musk has filed his appeal.
Tesla stated last month: “This ruling, if not overturned, means that judges and plaintiffs’ lawyers run Delaware companies rather than their rightful owners – the shareholders.”
Musk has also previously slammed McCormick by taking to his own social media platform X, formerly Twitter, where he described the judge as ‘a radical far left activist cosplaying as a judge’.
The tech mogul had previously said that he wants to own at least a quarter of Tesla’s shares before he makes it a ‘leader’ in robotics and AI.
This would mean buying a significant amount more as he currently owns around 13% of the firm’s shares.
Elon Musk will be taking on a new role under DOGE (Brandon Bell/Getty Images)
Musk is no stranger to using his platform to be vocal about an array of issues and in recent months has publicly expressed his political views often.
He threw his weight behind Donald Trump during last year’s presidential election, even attending political rallies.
Since Trump’s election victory, the president-elect announced that Musk would be taking on the role as head of the new Department of Government Efficiency (DOGE).
While it isn’t technically a government department, it’s reported that DOGE will act as an outside advisor to Trump’s administration.
Under the new role, Musk has already promised to slash the federal budget by trillions.
Speaking about the appointment, Trump has stated that DOGE will help his team to ‘dismantle government bureaucracy, slash excess regulations, cut wasteful expenditures and restructure federal agencies’.
It is not yet clear whether this will impact Musk’s appeal process.
The two biggest names head to head in the space race are Elon Musk and Jeff Bezos. But according to the Amazon founder, he’s not losing any sleep over Musk’s progress.
According to Reuters, Bezos shared his optimism about the US government’s space agenda and made it clear he’s confident in Blue Origin’s mission.
Bezos’ company is currently prepping its New Glenn rocket, a towering 30-story spacecraft that’s tasked with eventually launching the company’s moon lander for NASA.
It was due last Monday after several delays, but was postponed for at least another day due to a last-minute issue with the vehicle.
“Elon has been very clear that he’s doing this for the public interest and not for his personal gain. And I take him at face value,” the Blue Origin founder told Reuters on Sunday.
PATRICK T. FALLON / Contributor / Getty
Meanwhile, the Tesla CEO has invested over a quarter billion dollars in supporting Trump whilst keeping up to date on space matters.
Last month, Musk said the US should skip the moon and head straight for Mars which aligns perfectly with his ambitious plans to colonise Mars.
During his second term as president, Trump is expected to overhaul NASA’s moon program and prioritise missions to Mars.
“My own opinion is that we should do both – we need to go to the moon and we should go to Mars,” Bezos said when asked if he was concerned about changes to NASA’s moon program.
“What we shouldn’t do is start and stop things. We should continue with the lunar program for sure.”
Amazon contributed $1 million to Trump’s inauguration fund and plans to stream the event on Prime Video. Apparently, Bezos has previously met with Trump but told Reuters: “We really haven’t discussed space.”
Brandon Bell / Staff / Getty
NASA’s multibillion-dollar Artemis moon program was initiated during Trump’s first term. The project aims to return humans to the lunar surface later this decade and gained the support of President Joe Biden when he was in the White House.
Blue Origin also has ties with NASA in that it has a $3 billion contract to land humans on the moon under Artemis.
“All of these programs take longer than any one presidential administration,” Bezos said. “So you do need continuity in these programs if you’re going to see progress be made.”
All the while Trump has shown a strong focus on Mars missions, fixating on Martian plans and almost hinting at diverting NASA’s space exploration priorities.
More than just because of his bank balance as the world’s richest man, Elon Musk wields an awful lot of power.
After standing on the campaign road with Donald Trump, Musk has allied himself with the President-elect, landed a new position as the co-head of the Department of Government Efficiency, and seen his wealth soar as Bitcoin and other cryptocurrencies boom.
As well as hopes of sending people to Mars, Musk is putting the pedal to the metal with Tesla, and is the controversial owner of X (formerly Twitter).
Musk isn’t known as the shy and retiring type, even wading into the world of politics in other countries.
Despite residing in America, Musk has made his feelings about the United Kingdom clear.
As well as criticizing Prime Minister Kier Starmer, he referred to safeguarding minister Jess Phillips as a ‘rape genocide apologist’, and said Nigel Farage doesn’t have what it takes to lead the Reform Party.
Neil Kinnock has warned about Musk’s potential influence in UK politics (Anna Barclay / Contributor / Getty)
Musk’s interest in foreign politics hasn’t gone unnoticed, with former Labour leader Neil Kinnock saying he should stay out of it.
Speaking to BBC Radio 4 (via HuffPost UK) Kinnock said: “Trump has given Musk official status. He is going to be in charge, together with another guy, of a federal government department, and that’s on top of being the most powerful private individual in human history, as well as being the world’s richest man.”
He said that Musk should be ‘regarded as a national enemy’ and slammed the tech billionaire for his takedown of Starmer.
Kinnock continued: “He’s gunning for Keir and he’s got to be resisted, and I don’t think that should be limited to Labour supporters.
“I think that when somebody has very clearly declared antagonism on this level to the prime minister of the United Kingdom, he should be regarded as a national enemy.”
Kinnock led Labour from 1983 to 1992 and said that UK politicians need to unite against Musk. It comes amid fears that Musk is pushing for a UK invasion.
Musk said Starmer should ‘be in prison’ for not doing enough about grooming gangs when he sat as the director of public prosecutions.
The Prime Minister didn’t take the tirade lying down, and referring to Musk’s attack on Phillips, he said: “On Elon Musk, I think most people are more interested in what is going to happen to the NHS, frankly, than what is happening on Twitter.”
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