Analysis-Tesla brand threatened by harassment complaint from Musk, criticism of Democrats | The mighty 790 KFGO

By Hyunjoo Jin and Paul Lienert

(Reuters) – Elon Musk has made a name for himself and Tesla by breaking the rules, but the billionaire’s latest comments on politics and a sexual harassment allegation against him that he says are false could hurt the brand in the eyes of some car owners and employees.

Musk on Thursday denied a Business Insider report that he sexually harassed a flight attendant on a private jet in 2016, calling the person who made the claim a liar.

The day before, the CEO of Tesla, amid a controversial effort to buy Twitter Inc, said he would now vote Republican instead of Democrat and called Democrats a “party of division and hate”.

Tesla was also cut this week from the widely followed S&P 500 ESG index, which an index official said was due to issues including allegations of racial discrimination at the company and accidents related to his vehicles.

Musk responded by calling these environmental, social and governance (ESG) ratings a “scam” and wondered how the index could bring down an electric car company while adding oil and gas producers. gas.

Tesla could not immediately be reached for comment.

While Musk has made eye-catching headlines before – calling a critic a “paedophile” on Twitter – the latest controversies again raise questions about whether his outspokenness will tarnish his sympathy. And — since Musk is so closely tied to Tesla — whether it will hurt the automaker’s sales, especially in California.

The left state is Tesla’s biggest market, accounting for nearly 40% of the company’s retail registrations in the United States last year, according to data from Experian. Tesla sales in California rose nearly 70% during the year and accounted for 6.5% of all vehicles in the state, according to the California New Car Dealers Association.

#BoycottTesla trended on Twitter on Friday with several people claiming they were canceling their car orders.

“In the past, I admired him for working to create a green company that transforms energy consumption. But he unfortunately becomes divisive as an attention-seeking troll and I no longer believe he is dedicated to the quality of his products. I will cancel my Tesla order,” said J Yeh, a Twitter user who describes herself as a lawyer who has lived in several cities including Los Angeles.

“You have lost a potential customer,” said a Twitter user named Ute Bauer from Germany, adding in German: “To everyone reading this, cancel your orders.

Reuters was unable to confirm whether any Tesla orders had been cancelled.

Many institutional investors may back Musk no matter what given the company’s strong performance, but that doesn’t mean some aren’t frustrated.

“They’re doing a lot of good things,” said Taylor Ogan, CEO of Snow Bull Capital, which owns Tesla stock. “It’s just disappointing when it’s tainted by Elon Musk’s antics. Elon Musk is the best thing for Tesla and the worst thing for Tesla.”

A Tesla employee, who asked not to be identified, expressed frustration that Musk’s efforts outside of Tesla appear to be hurting the automaker’s stock. “The company needs to do something to fix the problem,” he said.

Tesla shares fell nearly 9% on Friday, knocking about $66 billion off Tesla’s market value and putting the stock at its lowest level since last August, with analysts citing “risks of distraction of the Twitter agreement. Musk assured people Thursday that Tesla was constantly on his mind.

If the discussion around water coolers at work focused on the sexual harassment allegation against Musk rather than Tesla products, the end result could be “corrosive” to the Tesla brand, said John Smith, former vice president. group president at GM who led global product planning.

Employees at Tesla and SpaceX could also become “a little shaken and angry” over Musk’s anti-Democratic comments, as staff at tech companies in California tend to be more liberal, said Jason Stomel, founder of the company. executive technology talent agency.

NASA administrator Bill Nelson, which relies on Musk’s SpaceX to fly its astronauts into space, told Reuters on Thursday that Musk has a strong executive team at the spacecraft maker and that the partnership of the agency with the company “went without a hitch”.

And Musk still has a lot of fans online. Twitter user @JVega103 said he was a Republican who owned a Tesla and had just signed up for Tesla Solar Panels. “Thank you for all you do,” the user tweeted.

That has left some industry watchers wondering if Musk and Tesla would simply brush off these latest controversies, as they have in the past.

“Is Elon Musk now mad, or mad as a fox? He got the benefit of the doubt because he often plays chess while the rest of us play checkers,” said Northwestern University professor Erik Qualman. “As Musk himself said on ‘Saturday Night Live’, ‘What, did you think I would be normal?'”

(Reporting by Hyunjoo Jin in San Francisco and Paul Lienert in Detroit, additional reporting by Tina Bellon in Austin, Texas; Noel Randewich in San Francisco, Joey Roulette in Cape Canaveral, Florida; Ben Klayman in Detroit and Nivedita Balu in Bengaluru; Editing by Peter Henderson and Rosalba O’Brien)

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