Analysis: Tesla brand threatened by Musk harassment claim, criticism of Democrats

May 20 (Reuters) – Elon Musk has made a reputation for himself and Tesla by breaking the foundations, however the billionaire’s newest feedback on politics and a declare of sexual harassment towards him that he stated is unfaithful could damage the brand within the eyes of some automobile homeowners and workers.

Musk on Thursday denied a report by Business Insider that he sexually harassed a flight attendant on a non-public jet in 2016, calling the one that made the declare a liar. learn extra

The earlier day, the Tesla chief govt, within the midst of a contentious effort to purchase Twitter Inc (TWTR.N), stated he would now vote Republican as an alternative of Democrat and known as the Democrats a “party of division and hate.” learn extra

Tesla additionally was minimize this week from the broadly adopted S&P 500 ESG Index, which an index govt stated was attributable to points together with claims of racial discrimination inside the firm and crashes linked to its automobiles. learn extra

Musk responded by calling such scores round environmental, social and governance (ESG) points a “scam,” and questioned how the index might drop an electrical automobile agency whereas including oil and gasoline producers. learn extra

Tesla couldn’t instantly be reached to remark.

While Musk has made attention-grabbing headlines earlier than – as soon as calling one critic a “pedo guy” on Twitter – the newest controversies once more elevate the query whether or not his outspokenness will tarnish his likeability. And – since Musk is so intently tied to Tesla – whether or not that may that damage the carmaker’s gross sales, particularly in California.

The left-leaning state is Tesla’s largest market, accounting for almost 40% of the corporate’s U.S. retail registrations final yr, in keeping with Experian knowledge. Tesla gross sales in California have been up nearly 70% within the yr and it had a 6.5% share of all automobiles within the state, in keeping with the California New Car Dealers Association.

#BoycottTesla was trending on Twitter on Friday and several other folks claimed they have been canceling their automobile orders.

“In the past, I admired him for working to build a green business that’s transformational in energy use. But he is sadly becoming divisive as an attention seeking troll and I no longer trust that he is dedicated to the quality of his products. I will cancel my Tesla order,” stated J Yeh, a Twitter person who describes herself as a lawyer who has lived in a number of cities together with Los Angeles.

“You lost a potential customer,” a Twitter person named Ute Bauer from Germany stated, including in German: “To anyone reading this, cancel your orders.”

Reuters was unable to verify if any Tesla orders had been canceled.

Many institutional traders could stand by Musk it doesn’t matter what given the corporate’s sturdy efficiency, however that does not imply some aren’t pissed off.

“They’re doing a lot of good things,” stated Taylor Ogan, CEO of Snow Bull Capital, which owns Tesla shares. “It’s just disappointing when that is tainted by Elon Musk’s antics. Elon Musk is the best thing for Tesla and the worst thing for Tesla.”

One Tesla worker, who requested to not be recognized, voiced frustration that Musk’s efforts outdoors Tesla seemed to be hurting the carmaker’s inventory. “The company needs to do something to address the issue,” he stated.

On Friday, Tesla shares dropped nearly 9%, knocking about $66 billion off of Tesla’s inventory market worth and placing the inventory at its lowest stage since final August, with analysts citing “distraction risks” from the Twitter deal. Musk assured folks on Thursday Tesla was continually on his thoughts. learn extra

If dialogue round water coolers at work centered on the sexual harassment declare towards Musk quite than Tesla merchandise, the top consequence may very well be “corrosive” for the Tesla brand, stated John Smith, a former group vice chairman at GM who ran international product planning.

Tesla and SpaceX workers additionally might turn out to be “a little bit rattled and angry” as a result of of Musk’s anti-Democratic get together feedback as expertise firm workers in California are usually extra liberal, stated Jason Stomel, founder of tech expertise company Cadre.

Bill Nelson, administrator of NASA, which depends on Musk’s SpaceX to fly its astronauts to area, instructed Reuters on Thursday that Musk has a powerful workforce of executives on the spacecraft maker and the company’s partnership with the corporate was “going without a hitch.”

And Musk nonetheless has lots of followers on-line. Twitter person @JVega103 stated he was a Republican who owned a Tesla and simply signed up for Tesla photo voltaic panels. “Thanks for everything you do,” the person tweeted.

That left some trade observers questioning whether or not Musk and Tesla would merely shake off these newest controversies, as they’ve previously.

“Is Elon Musk now crazy, or crazy like a fox? He has earned the benefit of the doubt as he is often playing chess when the rest of us are playing checkers,” Northwestern University professor Erik Qualman stated. “As Musk himself on ‘Saturday Night Live’ famously stated, ‘What, did you think I would be normal?'”

Reporting by Hyunjoo Jin in San Francisco and Paul Lienert in Detroit, further reporting by Tina Bellon in Austin, Texas; Noel Randewich in San Francisco, Joey Roulette in Cape Canaveral, Fla; Ben Klayman in Detroit, and Nivedita Balu in Bengaluru; Editing by Peter Henderson and Rosalba O’Brien

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