According to a new market study by consulting firm Caliber, the number of potential Tesla customers in the United States is declining, partly due to the controversy sparked by the automaker’s chairman, billionaire Elon Musk, Reuters reports.

While Tesla continued to post impressive sales numbers last year, helped by aggressive price cuts, analysts expect the electric car maker to report weak results for its latest quarter in the coming days.

Tesla’s “likeability score,” as measured by consultants Caliber, fell to 31 percent in February from 70 percent in November 2021, when the firm began tracking consumer interest in the brand.

Tesla’s price increase fell by 8 percentage points in the first month of the year alone, while Mercedes, BMW and Audi, which make both electric cars and traditional cars, rose in price over the same period, reaching 44-47%.

In the past, Elon Musk has blamed falling demand for expensive goods such as cars on the monetary policy of the Fed, the central bank in Washington, which has repeatedly raised key interest rates to reduce US inflation.

But Caliber points out that the strong association of Tesla’s reputation with Elon Musk’s reputation contributes to a decrease in trust in the company.

“It is very likely that Musk himself is contributing to the downfall of Tesla’s reputation,” Shahar Zilberschatz, CEO of Caliber, told Reuters. It is noted that 83% of Americans associate Musk with Tesla.

The controversy caused by Musk drags the Tesla brand with it

Reuters interviewed five marketing, polling and auto industry experts who say the controversy over Musk’s public statements is dragging down both the Tesla brand and demand for its electric vehicles.

“It’s pretty hard to sell without getting involved in politics,” says Tim Calkins, a marketing professor at Northwestern University’s School of Management.

Wall Street analysts also say that America’s financial woes, a lack of new low-cost electric car models and growing competition from rivals such as China’s BYD are also weighing on Tesla.

Despite these things, total electric vehicle sales in the U.S. will grow 15% in the first quarter of 2024, according to analysts at Cox Automotive. But in the case of Tesla, a company that relies on continued rapid growth, analysts expect growth of just 3%.

“The slowdown in EV sales is showing up as a slowdown in Tesla sales,” Stephanie Valdez Streeti, an analyst at Cox Automotive, said in a video conference call last Thursday.

Tesla’s stock market slide continues

The number of Tesla vehicles registered in the state of California – Musk’s largest US market – fell for the first time in 3 years in the last quarter of 2023, although overall sales of electric vehicles increased.

At least five consulting firms cut their estimates for Tesla shares last month, saying the automaker could post disappointing first-quarter delivery numbers.

Tesla’s stock price has fallen nearly 30% on the New York Stock Exchange since the start of this year.

Musk’s flamboyant personality helped the company as he helped fight climate change by switching to sleek electric cars, with the South African billionaire envisioning computers on wheels that could surpass traditional cars in terms of design, efficiency and ease of driving.

Tesla has achieved impressive annual sales growth for more than a decade.

Musk from hero to CEO with image problems

But in recent years, Musk has sparked numerous controversies with his comments and actions, including his recently announced public support for the Republican Party in the November election or his promotion of ideas that have been accused of anti-Semitism.

Musk has strongly denied his anti-Semitism and visited Israel last November to try to prove it.

When an investor asked him during a January 2023 video conference whether his political comments hurt Tesla’s sales and brand, Musk said he was “popular enough” and cited his then-current “X” page as an example. about 127 million subscribers.

“Whether you hate me, like me or don’t care, do you want the best car or not?” Musk said at another event in November 2023.

Brand Finance, a consultancy, found that Tesla’s reputation suffered last year in the US, the Netherlands, the UK and Australia. That hasn’t hurt in China, where Musk is seen as a public star, and in Germany, where Tesla in 2022 will inaugurate one of the largest car factories built in recent years.

A separate poll by CivicScience, a firm that specializes in analyzing consumer data, found that 42 percent of respondents had a negative opinion of Musk in February. In April 2022, when Musk first announced that he was interested in buying Twitter, that percentage was 34%.

“A modest but growing number of electric car buyers are increasingly confused by Elon Musk’s behavior and policies, and are now finding viable alternatives to Tesla in the market,” Ed Kim, president of consulting firm AutoPacific, told Reuters.

Tesla is still doing well on the loyalty of existing customers

But at the same time, Tesla’s reputation remains golden among many of its existing customers. A survey by research firm S&P Mobility shows that Tesla enjoys the highest level of loyalty among all major electric vehicle brands, with 68% of Tesla owners who bought a new car last year also choosing a Tesla vehicle.

Christian Cook, a Texas resident who drives a Tesla Model 3, says that although he has right-wing political views, Musk’s actions do not affect him in any way because he has become indifferent to his “extravagances”.

Kat Beyer, an environmental activist from Wisconsin, told Reuters she wanted to avoid Tesla because of Musk’s support for the Republican Party, but bought a Model Y last year because of the number of small electric cars with reliable charging infrastructure.

“It’s hard to drive a car associated with him,” Beyer says of Musk. “But I can’t go back to gas,” she justifies her decision.