Analysts are concerned that the Tesla CEO's inflammatory political and personal views are pushing away potential EV buyers, at a time when the sands are shifting for the electric vehicle market.
Shahar Silbershatz, the CEO of market intelligence firm Caliber, told Reuters it was "very likely" that Musk was contributing to Tesla's declining appeal.
Caliber data provided to the news agency found that the number of potential buyers of its EVs in the US had declined, partly because of Tesla's divisive CEO.
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Tesla's "consideration score" has fallen significantly over the past few years. In February, the EV-maker's score on Caliber's metric of whether consumers trust and like a brand and would consider buying its products plummeted to 31% — less than half its high of 70% in November 2021, Reuters reported.
Some people who bought Teslas as a mark of their environmental commitments are now uncomfortable about being associated with such a polarizing figure, suggested Colin Rusch, a senior analyst at Oppenheimer, in an interview on CNBC's Squawk Box on Tuesday.
Those same drivers are now looking to "spend their dollars elsewhere," he said, pointing to alternative makes such as Rivian and Volkswagen, and the resurgence of hybrid cars.
Instead of rushing out to buy Teslas, Rusch said "consumers are saying, 'I can wait and see what else comes to market.'"
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Musk has spoken out about a range of controversial topics recently, including immigration, diversity, equity, and inclusion (DEI) policies, the Ukraine war, and trans rights.
On Monday — April Fool's Day — Musk quipped on X that he was "excited to join Disney as their Chief DEI Officer. Can't wait to work with Bob Iger & Kathleen Kennedy to make their content MORE woke!"
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Earlier this year, Tesla dropped language promoting a diverse workforce from its annual 10-K filing.
His takeover and rebranding of Twitter as X has also boosted his public profile and sparked intense scrutiny. Some have raised concerns about his decisions about X, including rounds of mass layoffs and the expulsion of journalists from the platform.
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Musk is often seen as a figurehead for the EV maker, which means his actions outside Tesla can directly affect the company. Caliber's data found that 83% of Americans connect the billionaire with Tesla.
Some Tesla owners have already spoken out about ditching the EV brand over Musk's antics.
Three Tesla owners previously told Business Insider Musk had made them rethink their relationship with the brand, citing his erratic online presence and political comments among other examples.
Tesla did not immediately respond to a request for comment from BI, made outside normal working hours.
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The company is having issues beyond the public perception of its CEO. Tesla delivered about 387,000 vehicles in the first three months of the year, marking the first year-on-year drop in nearly four years.
