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Elon Musk Returns Focus to Tesla, but Is the Brand Damage Already Done?

Elon Musk has announced he’s stepping back from his role leading the Department of Government Efficiency (DOGE) next month to dedicate more time to Tesla, but many are questioning whether this move comes too late to undo the harm already done to the company.

Musk said he will now spend just one or two days per week at DOGE and shift his attention back to Tesla. However, the fallout from his controversial political stance and support of former President Donald Trump has already made a significant mark.

Tesla has faced showroom protests, facility vandalism, and, earlier this month, reported its steepest sales decline on record for the first quarter, as customers distanced themselves from the brand. Even some loyal supporters now question whether the damage is reversible.

Some investors believe Musk’s reduced involvement in DOGE could stabilize Tesla’s future. The stock even rose over 3% in early Wednesday trading despite the company announcing a 71% year-over-year drop in net income. Yet, even bullish analysts like Wedbush’s Dan Ives caution that the damage may be lasting, predicting a 10% permanent drop in demand due to Musk’s polarizing political activities.

“The brand damage from Musk’s political involvement won’t just vanish — it’s left a lasting mark, especially in Europe and the U.S.,” Ives noted in a client update.  Musk has rejected claims that his political affiliations have hurt Tesla’s image, attributing the protests to so-called "paid protestors" without providing evidence. He blamed the sales slump on broader economic conditions and consumer uncertainty.

However, rival automakers have reported strong EV sales during the same period, suggesting that external factors alone don't explain Tesla’s downturn. Tesla CFO Vaibhav Taneja acknowledged the impact of hostility and vandalism on deliveries in some regions. Ives told CNN that the shocking Q1 results likely pushed Musk to reduce his time at DOGE. “There’s no way to spin what happened this quarter,” he said.

Others argue the damage goes even deeper. Gordon Johnson of GLJ Research, a long-time Tesla critic, believes Musk has alienated the company’s core environmentally conscious customer base — particularly liberals — and that the harm is “100% irreversible.” He notes that the decline began before Trump’s return to the political spotlight, citing Musk’s social media activity and controversial decisions like reinstating far-right accounts on X.

Kelly O’Keefe, founder of Brand Federation, went as far as to call Musk’s actions “brand homicide.” He said Tesla was once a proud symbol of environmental responsibility but is now in a downward spiral. “It used to be a badge of environmental concern. Now it’s a brand in free fall,” O’Keefe said. “And it’s hard to see how the damage gets undone.”

Paraphrasing text from "CNN"all rights reserved by the original author