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What Every Company Can Learn from Tesla’s Brand Fallout
Chris Langathianos • April 10, 2025

What Every Company Can Learn from Tesla’s Brand Fallout 

Tesla's recent struggles show how controversies can damage a brand. CEO Elon Musk's recent controvercial decisions have alienated a significant portion of Tesla's eco-conscious customer base. The fallout has been severe:


  • Stock Decline: Tesla's stock dropped 36% in Q1 2025, erasing $460B in market cap.
  • Sales Impact: Vehicle deliveries fell 13% year-over-year in Q1 2025, with market share in Europe and Germany plummeting.
  • Customer Trust: Favorability among Democrats dropped 23% from January to July 2024, while Tesla's brand consideration score halved since 2021.


This highlights a key lesson: brands risk fallout when taking sides on divisive issues, and this is particularly true in politics. It highlights how important it for brands to remain focused on their core mission, establish authenticity, and earn trust from the market.


You may be asking yourself, well hold on, how is this any different that what other brands like Ben and Jerry’s have done over the years. The key difference is that even though they may express views that some may find divisive, these views didn’t counter their core brand essence, in fact it enhanced it. 


Conflicts Hurting Brand Performance


Brand Value Losses

Tesla experienced a hit to its brand value following statements from its CEO that many perceived to be divisive or off-brand. Survey results showed that 45% of respondents viewed the impact as "negative," while 40% described it as "extremely negative" [2].


Customer Trust Breakdown

Tesla's favorability ratings have sharply declined, particularly across political affiliations:


The number of Tesla owners identifying as Democrats dropped from 39% in 2023 to 26% in 2024 [3]. In California - a key market for electric vehicles - registrations of the Model Y fell by 17% during Q1 2024 compared to the same period the previous year [3]. And this is before the actions taken by the Musk-led Department of Government Efficiency (DOGE).


These changes in consumer sentiment have led to immediate and vocal reactions from the public.


Political Actions and Public Response

Departing from Tesla's core brand image, the CEO's political endorsements sparked widespread backlash. At its core are the many Tesla consumers who eagerly bought Teslas because it aligned with support for green energy and sustainability initiatives. 


"He has significantly alienated most of his buying base. It's going to kill the business. I can't imagine a single Democrat, or, let's say, very few of them, willing to buy a Tesla at this point", said investor Mark Spiegel [3].


"This final stance of Elon has put me in a really difficult moral position. I'm driving a Cybertruck and now it's like a MAGA truck," shared Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management [3].


Public perception of Tesla has shifted dramatically, leading to protests at showrooms and incidents of vandalism targeting Tesla vehicles [1]. This growing public discontent signals deeper challenges for the brand, which will be explored further in the next section.


Are customers abandoning Tesla because of Elon Musk and ...


Business and Brand Damage

Tesla's involvement in contentious political matters has led to clear financial setbacks and damage to its reputation.


Q1 2025 Performance Drop

Tesla’s political controversies have shaken customer confidence, and the impact is now visible in its business results. The company delivered 336,681 vehicles in Q1 2025, marking a 13% drop compared to 386,810 units in Q1 2024 [4]. Here’s how key metrics reflect this downturn:

"We knew first quarter Tesla deliveries would be soft but these numbers were bad...they were a disaster on every metric. Refresh issues but brand crisis key."  – Dan Ives, Wedbush Securities Analyst [4]


This decline goes beyond numbers - it’s also chipping away at Tesla’s identity as a market leader.


Decline in Environmental Leadership

Tesla’s position as a leader in sustainability has taken a hit. The company’s brand consideration score, which peaked at 70% in November 2021, plummeted to 31% by February 2025 [5]. Tim Calkins, a marketing expert from Northwestern University's Kellogg School of Management, explains:  "It is hard enough to win sales without getting into politics." [5]


Erosion of Leadership Trust

Elon Musk’s political activities have further complicated Tesla's brand image. With 83% of Americans directly associating Musk with Tesla [5], his actions have become intertwined with the company’s reputation. Public trust is waning, as 42% of respondents held an unfavorable view of Musk in February 2024, compared to 34% in April 2022 [5].


"It's very likely that Musk himself is contributing to the reputational downfall."  –Shahar Silbershatz, Caliber CEO [5]

Ed Kim, a crisis management expert at AutoPacific, adds: "A modest but growing number of EV shoppers are increasingly put off by Elon Musk's behavior and politics and are now finding viable alternatives to Tesla in the marketplace." [5]


How to Fix Brand Alignment


Return to Core Mission

Tesla needs to refocus on its primary goal: accelerating the transition to sustainable energy. This involves prioritizing innovation, setting clear objectives, and tailoring strategies to local markets.

By realigning internally, Tesla can begin to repair the trust lost due to recent political controversies. These adjustments also create a foundation for leveraging insights from the latest market research.


Improve Brand Management

Eric Dezenhall, a crisis management expert, advises focusing on operational excellence rather than political narratives [1]. For Tesla, this means shifting its messaging to spotlight product innovation and sustainability while steering clear of divisive topics. With 85% of investors expressing concerns about the negative impact of political involvement on Tesla [2], the company must prioritize rebuilding trust by staying true to its original mission.


Managing Risk in Brand Strategy

Tesla's situation highlights a key takeaway: diving into divisive issues can seriously damage a brand's reputation. The company's nearly 40% share drop in early 2025 [2] is a clear example of how political controversies can erode both brand value and customer confidence.


Crisis management expert Eric Dezenhall puts it plainly: "It's almost impossible to be a politically divisive figure while running a consumer brand" [1].


To handle these risks effectively, brands can focus on specific strategies. Here are three areas to consider:

These steps provide a clear path for addressing the damage. Dezenhall further emphasizes:


"The aim of crisis management is to stop an attack, not improve an image. First, get back to business. Leave politics to somebody else. This isn't your thing" [1].


To strengthen their position, brands should also rely on market research to guide their next moves. With 85% of stakeholders believing political involvement harms a brand [2], data-driven decisions can help leaders refocus on operational priorities and core values, ensuring long-term stability and success.

By Matt Bowen April 3, 2025
B2B marketing is a high-stakes game, data is everywhere—but insight is rare. One of the most powerful yet underutilized sources of marketing intelligence is a clear view of your brand’s health. Not vanity metrics, but a deep, diagnostic look at how your brand is perceived at every stage of the buyer’s journey. With perceived being the key word here. This kind of insight doesn’t come from your CRM or website analytics. It comes from targeted audience research that maps how each buyer persona perceives your brand at every key touchpoint in the funnel: awareness, familiarity, consideration, usage, and loyalty. When done right, it’s like getting an X-ray of your entire marketing engine—and your competitors’ too. Think how useful this is for a marketing and revenue team. Defining Brand Health: Perceptions Across the Funnel Brand health isn’t a single number. It’s the sum of how well your brand is performing in the minds of your target audiences—at every step of the funnel: Awareness – Do your ideal customers even know your brand exists? Familiarity – Can they describe what you do and how you’re different? Consideration – Would they include you in their shortlist when making a purchase decision? Usage – Are they choosing you and experiencing the value you promise? Loyalty – Do they stay, recommend, and grow with your brand? When you understand how each of your target personas perceives your brand at these stages, you can pinpoint the exact points where your marketing is working—or where it’s leaking leads and losing revenue. Why You Can’t Rely on Internal Data Alone Here’s the reality: most internal dashboards can only tell you what people do. But they can’t tell you what people think. And what they think determines whether or not they’ll engage with you in the first place. The only way to measure brand health accurately is through targeted audience research—surveys and qualitative insights gathered from your actual buying personas (or those of your competitors). This research reveals how each group perceives you at every stage of the funnel, uncovering blind spots and opportunities that performance data alone can’t provide. The Strategic Power of a Brand Health X-Ray When you can see brand health perceptions by funnel stage and by persona, you unlock powerful advantages for both marketing and revenue teams: Focused Strategy If awareness is high but familiarity is low, you know your messaging isn’t landing. If consideration is weak, you may need to clarify your value proposition or address trust barriers. This enables marketing to focus efforts where the funnel is breaking down—no guesswork. Smarter Budget Allocation Instead of spreading your budget evenly or betting on assumptions, brand health insights show you exactly where to invest to get the highest return. No more overspending at the top of the funnel when the real issue is mid-funnel conversion. Competitive Benchmarking When you include competitor data in your brand health assessment, you can see how buyers perceive your rivals at each stage of the funnel. Are they winning on awareness but losing on loyalty? Are you the most considered, but not the most chosen? This is the kind of clarity that drives smart positioning. The Business Case: Stats That Matter Companies that monitor brand health regularly are 60% more likely to exceed revenue goals. Consistent brand presentation can increase revenue by up to 20%. Brands with strong funnel-wide perception outperform competitors by up to 3X in customer retention and advocacy. To get started, B2B marketers should: Identify Key Personas – Who are your target buyers? Define them clearly. Map the Funnel Stages – Customize the funnel stages to match your sales cycle. Launch Targeted Research – Use surveys, interviews, or brand assessment tools to gather perception data. Analyze and Benchmark – Compare across personas and against competitors. Act on Insights – Use findings to adjust messaging, content, media spend, and sales enablement. Marketing teams are under more pressure than ever to prove impact. By measuring brand health through the lens of funnel-stage perceptions across key personas, you equip your team with the clarity to act with precision—and avoid wasting time and budget on the wrong problems. It’s not just about knowing how your brand is doing. It’s about knowing why—and what to do next. Want help setting up a brand health assessment for your organization? DM me and let's talk about how to build your own X-ray view of your brand and your competitors.
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