Tesla (TSLA) has suffered major reputational damage over the last few months on a scale never seen before in the automotive industry, according to JPMorgan Chase (JPM) analysts.
“We struggle to think of anything analogous in the history of the automotive industry, in which a brand has lost so much value so quickly,” said JPMorgan analysts led by Ryan Brinkman.
The analysts said the most comparable examples are likely the sales decline suffered by Japanese and South Korean automakers in China in 2012 and 2017, respectively.
Companies like Hyundai Motor Co. (HYMTF) took a major hit in 2017 after Chinese citizens boycotted to protest over South Korea’s decision to deploy a U.S. missile defense system. Korean brand sales have never fully recovered, JPMorgan said.
Toyota Motor Co. (TM) and Nissan Motor Co. (NSANY), among others, slashed production in China after anti-Japan protests over disputed territory closed dealerships and slammed sales. Those automakers recovered after about a year of pain, and their biggest issues in China are now competing with domestic innovation.
But there’s a big difference between the backlash Tesla is currently facing and those two instances — Tesla’s is international.
Peaceful protests have been organized at Tesla showrooms and facilities across the U.S. to protest Tesla CEO Elon Musk, who has become a major figure in President Donald Trump’s government. In an interview earlier this week, Musk told Fox Business (FOXA) that he has been running his businesses with “great difficulty” as he focuses on the Department of Government Efficiency (DOGE).
But more than a dozen violent or destructive acts have also been directed at the company’s facilities since late January, according to The Washington Post, including one instance where an individual planted a Molotov cocktail near a vehicle. There have also been several reports of individual vehicles or Superchargers being vandalized.
In France, a dozen Teslas were set on fire near the city of Toulouse, France24 reported. And in Berlin, fires broke out at a construction site for the expansion of a Tesla factory.
The research and consulting firm Brand Finance estimated Tesla’s brand stood at $43 billion in October 2024, down $66.2 billion at the start of 2023, a few months after Musk began openly supporting Trump’s re-election efforts. He spent about $288 million on the 2024 election, making him the largest donor of the cycle.
Tesla’s sales across Europe — including Norway and Germany — have sunk over the past few months, partially due to Musk’s political activities. In February, Tesla’s Chinese shipments plunged 49% to 30,688 units, its lowest monthly figure since July 2022. In California, traditionally Tesla’s biggest domestic market, sales have dropped for five straight quarters.
