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Opinion | Elon Musk’s Twitter Antics Are Hurting Tesla’s Brand


Then, inexplicably, Musk turned to Twitter and pushed Tesla into the abyss. This year, as he sold tens of billions of dollars in Tesla stock to fund a Twitter deal and seemed to stake his reputation on taming the controversies that are stirring up one of the most divisive online, shares of Tesla fell more than 60%. Its decline was deeper than that of most of its rivals and far more than that of the S&P 500, which has fallen about 19% for the year.

Not all of Tesla’s problems are caused by Musk. Like other global manufacturers, the company has faced production delays related to Covid in China. It has struggled to ramp up production at its new facilities in Austin, Texas and Berlin. The steady rise of interest rates by the Federal Reserve and the prospect of a looming recession have also dented Tesla’s fortunes. On Twitter, Musk has repeatedly blamed the Fed for Tesla’s stock plunge.

But analysts and investors I spoke to said these were side issues. “Tesla is Musk and Musk is Tesla,” said Dan Ives, an analyst at Wedbush Securities who tracks Tesla. Unlike most other automakers, Tesla spend almost no advertising. Musk has long been the company’s sole chief marketer and evangelist, the main driving force behind the world’s desire to buy Tesla. And so any shift in Musk’s cultural standing will affect the company’s position as well. Ives said that Musk’s time running Twitter was “major brand ruin for Musk and Tesla.

Tesla cannot shake off these problems. Musk has pledged to step down as Twitter CEO as soon as a replacement is found; Ives and Gerber tell me that if this happens relatively quickly and Musk somehow becomes disciplined in staying away from polarizing views online, Tesla could quickly regain its former glory. this.

Tesla still has some advantages over its rivals, especially more network 40,000 chargers worldwidemakes Teslas easier to manufacture than other EVs But the federal government plan to spend billions installing chargers across the country, will most likely erode Tesla’s lead. (Tesla has opened my charger in Europe to cars manufactured by other automakers; it said it plan to do so in North Americatoo.)

Colin Rusch, an analyst at investment firm Oppenheimer & Co., pointed out that Tesla has also led for many years in a number of electric vehicle technologies. It has invested deeply in advanced battery design and more efficient manufacturing processes, areas where its rivals are just getting started. Recently, however, Rusch low class his expectations for Tesla’s stock price, citing increasingly negative sentiment towards Musk.

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