Tesla Faces Struggles Amid Elon Musk's Controversial Politics

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Tesla is experiencing a significant decline in brand favorability and stock performance, as concerns over CEO Elon Musk's political affiliations grow. According to Saxo Bank's Jacob Falkencrone, Musk's embrace of far-right ideologies is alienating environmentally conscious customers and impacting investor confidence. The company’s stock value has dropped over 25% since December, making it the worst performer among the "Magnificent Seven" tech stocks.

Despite promising to boost vehicle sales, Tesla has scaled back its projections after suffering a historic decline in 2024. Analysts from Stifel report that Tesla's net favorability rating has plummeted to just 3%, its lowest ever. Musk's controversial actions, including cheers to far-right movements, have prompted backlash, particularly in Germany, where demand for Tesla vehicles dropped by 60% since January.

While the Tesla brand is losing traction in Europe, demand remains robust in Asia, where government censorship insulates consumers from Musk’s controversial online presence. As Tesla attempts to navigate these challenges, its strategies, including the anticipated robotaxi pilot program, will be crucial to its recovery.

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