Tesla's Week of July 25th: Various Model Y Options, Musk Protests, Safeguarding Superchargers, BYD Rally Participation
Tesla Faces Challenges Amidst Political Controversy and Competitive Pressure
In a year marked by political involvement and competitive pressure, Tesla, the leading electric vehicle manufacturer, has faced a series of challenges.
Elon Musk, Tesla's CEO, has been making headlines for his political activism, particularly his endorsement of Donald Trump and plans to form the "America Party." This move has had a notably negative impact on Tesla's brand loyalty and stock performance in the U.S. According to reports, Tesla's U.S. brand loyalty fell sharply from 73% in June 2024 to 49.9% by March 2025, indicating political backlash among customers. Although loyalty slightly rebounded to 57.4% by May, it still lags behind competitors like Chevrolet and Ford.
The political activism appears to have distracted Musk from focusing on Tesla's core business, causing concern among shareholders and consumers. Tesla's stock price reacted negatively when Musk announced internally he would form a new political party, with TSLA stock dropping 7% the day after the announcement. Despite Musk's political moves, concrete progress toward establishing the America Party appears limited as of August 2025.
In Europe, while direct sales impact data is scarce, the political backlash observed in the U.S. may similarly influence Tesla’s brand perception, especially among liberal or politically moderate consumers who are less willing to buy Teslas as their views of Musk shift negatively.
In terms of product development, Tesla has hinted at more variants of the Model Y to come, including a performance version and a seven-seater option, which was introduced for the Model Y in Europe only in October 2024. Deliveries of the new Model Y are set to begin soon.
On the operational front, Tesla is experimenting with solutions to make Supercharger cables difficult to cut and releasing a blue liquid inside if cut. The company has also introduced protection for its Superchargers in response to attacks. Max de Zegher, head of Supercharger technology at Tesla, announced that the company plans to operate the first pilot sites with Generation V4 switchgear for Supercharger pillars in the third quarter, allowing for up to 500 kilowatts of power delivery.
However, Tesla sold far fewer electric cars in January 2025 compared to the same month in the previous year in Europe and California. The company also faced challenges in China, where it experienced a significant drop in sales compared to its competitor BYD, which managed to maintain a 3.2% decrease in electric vehicle sales in China in January.
In other news, Tesla is facing growing instances of insults and aggressive behavior from other drivers towards normal Tesla customers, particularly Cybertruck owners in the U.S. There was also an attack on the rail connection to the Gigafactory in Grünheide, Germany.
Despite these challenges, Tesla continues to innovate and push the boundaries of the electric vehicle industry. The company's resilience and adaptability will be key in navigating these complexities and maintaining its position as a leader in the industry.
In light of Tesla's political involvement and the subsequent negative impact on brand loyalty, there is a potential for damage to extend to other sectors, such as technology partnerships or investments in the finance industry. Furthermore, the ongoing competitive pressure in the business world, particularly from companies like BYD in China, may exacerbate these challenges for Tesla.
