We’ve been talking about the impact of Elon Musk’s venture into politics on the Tesla brand for years, but now a new study from the National Bureau of Economic Research (NBER) is putting some staggering numbers to it.
According to a new working paper, Musk’s “polarizing and partisan actions” have directly cost Tesla over a million vehicle sales in the US alone.
The study, titled “The Musk Partisan Effect on Tesla Sales,” argues that without this effect, Tesla’s sales would have been 67% to 83% higher between October 2022 and April 2025. That’s an absolutely massive number, and it suggests Tesla’s recent sales slump isn’t just about “increased competition” or “pent-up demand” being satisfied.
It’s about the brand.
The researchers from Yale and NBER didn’t just run a poll. They dug into county-level, monthly new vehicle registration data for all EVs and hybrids from March 2020 to April 2025.
They used a “difference-in-differences” analysis. In simple terms, they tracked how sales trends changed in heavily Democratic-leaning counties versus heavily Republican-leaning counties. The “treatment” event that broke the trend? Elon Musk’s acquisition of Twitter in October 2022.
Here’s what the data shows:
- Before Oct. 2022: Counties with more Democrats showed an increasing preference for Teslas compared to Republican counties. This makes sense, as we know EV adoption has historically been higher among liberal-leaning buyers.
- After Oct. 2022: The trend dramatically reverses. As Musk’s political activities—including “relaxed content moderating of far-right and extremist voices” and massive campaign contributions—ramped up, Democratic-leaning counties began “shifting away from Tesla purchases”.
The study is blunt, noting Musk’s actions “antagonized his most loyal customer base”.
The paper runs two different models to quantify the damage, and the results are “remarkably similar”.
Aggregated from October 2022 through April 2025, the “Musk partisan effect” cost Tesla between 1.0 and 1.26 million vehicle sales.
Again, that’s in the US alone. Tesla’s sales in Europe have also been crashing over the last 2 years. Some of that has been attributed to Musk’s political activism, but Tesla is also facing tougher competition in Europe, where more EV models are available due to fewer protectionist rules.
To put the US numbers in perspective, that’s 67% to 83% of the actual number of Teslas sold during that same period.
By the first quarter of 2025, the study estimates Tesla’s monthly sales would have been about 150% higher if not for this effect.
Fewer Tesla sales, but no fewer EV sales
This is the other side of the coin. Those ~1 million buyers didn’t just give up on EVs. They bought from competitors.
The study finds a “nearly one-for-one substitution” from Teslas to other EVs and hybrids.
According to the study, Musk’s actions increased the sales of other electric and hybrid vehicles by 17% to 22%. So, while Tesla’s growth stalled and reversed, competitors like Ford, GM, Rivian, Hyundai, and Kia got a massive, unexpected boost, directly attributable to Tesla’s CEO.
And what about the other side? Did Musk’s shift to the right win over new Republican buyers?
The study says no.
They cite survey data showing that Musk’s public persona “significantly reduces liberal and Democratic support for Tesla without increasing conservative and Republican support”. Ouch.
Earlier this year, after President Trump held what amounted to a Tesla infomercial with Musk at the White House, we did note that Musk’s shift to the right isn’t likely to result in a significant boost in sales from conservatives.
That’s not just because electric vehicles are harder to sell to conservative people, but mainly because Tesla isn’t equipped to sell in rural areas and conservative states.
Electrek’s Take
We’ve been covering this anecdotally for ages, but the study puts actual numbers on what we have been saying for years: Elon Musk is destroying Tesla’s brand.
People who live on Twitter don’t see it like that, but X is not the real world.
These guys at Yale and NBER have actual data to prove it. To see it quantified like this is something else. A loss of over 1 million vehicles is not a rounding error. It is a self-inflicted disaster for the brand.
Because Tesla’s sales have been only marginally down globally over the last two years, Tesla fans don’t think the impact is significant, but that’s not the right way to look at it.
During the last 2 years, EV sales have continued to surge, and yet, the EV leader, Tesla, saw its sales go down. That’s a problem. Tesla was planning to grow heavily during that period. It was looking to build new factories.
Instead, it canceled new factory plans, such as Gigafactory Mexico, and it reduced utilization at its current factories to about 60%.
The craziest part is that this is just the brand damage. Now, the actual policy damage is starting to happen.
Musk wasn’t successful in doing much in politics, but he did get Trump elected, and he has now filled the tax credit in the US and removed regulatory credits for EVs.
Both of these moves are greatly negatively affecting Tesla, and the impact of those is only starting this quarter.
Musk’s move into politics was one of the all-time worst business moves.
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