Is there anything the Trump administration won’t do for Tesla?

Not only has Trump acted as a car salesman for the brand, imparting that he had bought one as Tesla sales tanked worldwide, but last week Commerce Secretary Howard Lutnick illegally told Fox News viewers to buy Tesla stock. Even after a better week last week, Reichsleiter Musk’s company stock price is down nearly 50% from its December highs.

Vandalism and destruction of Teslas and protests at Tesla outlets are now routine. Even speaking positively about Tesla will earn an online backlash. In response, Trump has called vandals “sick terrorist thugs”, warned they could be jailed in El Salvador for 20 years, and claimed the vandalism was worse than the January 6 assault on Congress. A Fox News anchor suggested the death penalty for vandals.

Official endorsement of the cars and company; the full security apparatus of the Trump state deployed to protect it — Tesla is now the official car of MAGAworld.

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Except, Tesla is doing a pretty good job of trashing its own vehicles: the company last week recalled the entire fleet of its “Cybertruck” because panels were falling off. It’s only a few months since all Cybertrucks were recalled for a problem with the ludicrously giant windshield wiper, and panels falling off, in 2024. In all, there have been eight recalls of the vehicle. It’s rapidly emerging as the electric equivalent of the Edsel. Cybertruck sales fell 32.5% in the US in February, even before the recall.

Abroad, as sales collapse, Tesla’s future in Germany — where Musk has endorsed the far-right AfD party — looks grim, given 94% of Germans say they will never buy one. Total Tesla shipments are now back to 2022 levels, despite the big expansion in the electric vehicle and hybrid markets since then.

Tesla has always been about being close to government. According to The Washington Post, in the United States alone it has received at least $15.7 billion in government subsidies over the last fifteen years (Musk’s other major company, SpaceX, has received even more — $22.6 billion). A large proportion of the subsidies were handed out during the Biden administration, while the company only exists because of a $465 million US government loan from the Obama administration.

In other countries, Tesla has benefited from consumer subsidies for electric vehicles (a key reason for the collapse in Tesla sales in Canada has been the end of federal and provincial subsidies) and in countries like Australia, an implicit subsidy from taxpayers in the absence of road use charges, given Tesla drivers pay no fuel excise.

This is no different to other electric vehicle manufacturers. The Chinese government, after making electric vehicles a priority in the early 2000s, has directed nearly US$30 billion in subsidies, tax breaks and procurement deals into electric vehicle manufacturing, and has now emerged as the world’s dominant electric vehicle producer, biggest consumer market and largest exporter. Chinese-made vehicles, which are much cheaper than Teslas, are now selling well in Western markets that don’t impose punitive tariffs on them (as the US and Canada do).

Interestingly, Chinese-owned electric vehicle brands appear to be of better quality than Western-owned brands that also manufacture in China. Along with BYD’s recent announcement that it had achieved super-fast recharging, this suggests Chinese subsidies haven’t just bought a Western industry, but generated real innovation within the Chinese industry itself.

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What the Chinese industry doesn’t have is a totemic figure like Musk who represents electric vehicles. In fact, there are still around 100 EV manufacturers in China even after years of consolidation and oversupply.

In becoming the official car of MAGA, Tesla might have concluded a long-term journey into an ever-closer relationship with the US government, but it has alienated its most likely purchasers — affluent, progressive Americans who believe in climate science and an active role for government, who are more likely to find in Trump the very antithesis of what they believe in politically. Until recently, US electric car owners have been up to four times more likely to identify as liberals or Democrats than conservatives or Republicans. That fell rapidly in 2024.

Moreover, Tesla buyers are much more likely to be buying a set of beliefs as much as an automobile — their purchasing decision was an expression of their values. And those values are anathema to Trump and Musk.

All those subsidies are going to come in very handy for Tesla. Its future as a global brand is now in doubt. Elon Musk has declared war on the people most likely to buy his cars.

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