I have wanted a Tesla ever since the day in 2012 when Elon Musk came to the FT’s London offices to talk about his electric car company.
Musk was not a household name then. But being the FT’s environment correspondent at the time I knew a bit about him and the red Tesla he arrived in, which I had read could go from zero to 60mph in less time than it took to light a cigarette.
The car looked even better in the flesh. When he proceeded to invite a colleague to go for a drive in it I would like to say I was big enough not to feel insensate with envy, but I was not.
The sting of jealousy has subsided and so too, I realised last week, has any great desire to own a Tesla. This is partly because Musk’s pioneering efforts prodded other carmakers to lift their electric game and there are a lot of rival cars to choose from, including some cheaper than Teslas.
But it is also because of what Musk told his 193 million followers last weekend on X, the social media platform he has turned into a dismal shell of its former self since buying it in October 2022.
“Civil war is inevitable,” he wrote in response to a video showing the far-right riots jolting UK cities, which another user had suggested were caused by “mass migration and open borders”.
Watching Downing Street protest that there was “no justification” for the billionaire’s inflammatory words reminded me of the White House’s condemnation of him in November, when he endorsed an anti-Semitic post on X. And the companies that pulled their ads from his platform. And the scores of other critics vainly urging him to be quiet.
G7 governments. Multinational corporations. Nothing has stopped Musk, who apologised for the November post but has allowed X to reinstate a string of divisive figures including Tommy Robinson, the face of far-right UK activism, one of whose posts on the riots Musk responded to with exclamation marks.
So all things considered I would rather not buy one of Musk’s cars.
This will hardly bother an EV giant like Tesla, whose Model Y sports utility was the world’s top-selling car of any kind, electric or otherwise, in 2023. But it does raise a question about when a business leader’s antics reach a tipping point and start to actively hurt the business.
The poster child for self-harming corporate behaviour in the UK is still Gerald Ratner, the former head of a jewellery empire that tanked after he joked in 1991 that some of its products were cheap because they were “total crap”.
Musk’s provocations are different. He typically champions his products fiercely, which makes him more like Michael O’Leary. The provocative Ryanair airline boss has called regulators “cretins” and airport operators “overcharging rapists”, but his jibes were generally aimed at highlighting his low-cost flights.
Also no matter what you think of O’Leary you sometimes have to fly on Ryanair because it’s the best way to get from A to B. Electric car buyers have far more choice, which is one reason some analysts think Musk’s polarising behaviour could spell trouble for his business.
The carmaker’s so-called “consideration rates”, or share of would-be buyers, have been trending down in the US since Musk started upending Twitter, now X, in late 2022, says Shahar Silbershatz, head of Caliber, the market intelligence firm that tracks Tesla’s scores daily.
The rates are considered a good predictor of sales, he told me last week, and Caliber’s data shows Tesla’s numbers started falling – from about 40 per cent in November down to 30 per cent in February – after a series of controversies including the anti-Semitism uproar.
Tellingly the falls were steeper among Democrats, who are generally bigger electric car fans, and this was before Musk endorsed Republican presidential hopeful Donald Trump in July. Caliber’s preliminary August figures suggest Tesla’s scores among Democrats have plunged further.
It’s impossible to say if Musk’s outbursts are causing these shifts. Tesla has suffered a raft of other pressures, from higher interest rates to supply chain glitches. But as Silbershatz says, at a time when Tesla faces all those headwinds, plus growing competition from other carmakers, Musk is giving his “natural buyers” in the US a good reason to shun his cars. As of last week I would say the same applies in the UK. In spades. - Copyright The Financial Times Limited 2024
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