Tesla’s 71% Drop. A Brand Issue. Not a Marketing Issue.

Let’s get the facts straight first. Tesla’s net income dropped 71% in the first quarter. That’s not a typo. Net income fell from $1.39 billion last year to just $409 million this year. Vehicle deliveries were down 13%, and automotive revenue dropped 20%. This isn’t a hiccup.

It’s a signal.

Elon Musk responded the way Elon Musk always does (and it’s worked in the past): with a promise and a performance. He said he’s going to spend more time back at Tesla, and during the earnings call, there were also announcements about new technologies and product updates meant to reaffirm Tesla’s place at the front of the innovation pack. And yes, the stock rose on that call. Investors still want to believe. They want to believe that a more engaged Musk and a fresher product line can steer this thing out of the storm.

But that belief? That’s the spin. I don’t buy it. Actually, I never bought it. But this time it’s not going to work. And it’s a lesson in brand versus marketing challenges.

If Elon Musk had spent 60 hours a week at Tesla over the past four months, it wouldn’t have changed the trajectory. Because the problem isn’t effort or management. The problem isn’t innovation. The problem isn’t even Tesla’s competitors.

The problem is the disintegration of the brand. They forgot who their market is, or was. And, they became the poster child for MAGA. Or Elon Musk did. And, Elon Musk is Tesla. He’s in the center of the controversy. Never where you want to be when you are selling something.

Tesla used to be a future-forward status symbol. It was green, it was fast, it was smart. It was political in the way Apple is political—silently, stylishly progressive. Liberal rich people loved it. A status symbol, like when Brad Pitt bought a Prius and everyone said he was such a good human. But now, after the last few months? Tesla is wearing the scarlet letter. As in Hawthorne’s scarlet letter. A fall from grace that has destroyed the brand.

I spend time in the Hamptons and in Palm Beach, and here’s what I’ve learned. People don’t want to make a political statement in the parking lot that might get them egged. Or badgered by strangers. Or get dirty looks. They want to show their new politics at cocktail parties and VIP boxes at the Kentucky Derby, where they are surrounded by like-minded people. They want plausible deniability for this new world they are supporting when they shop on Main Street. And Tesla doesn’t offer that anymore.

Tesla is not a MAGA brand. You can’t get more left-wing in intention than a zero-emissions, infrastructure-redefining vehicle. But because of Musk’s choices—his increasingly visible political agenda, his ties to Trump, his role in the so-called Department of Government Efficiency—Tesla now carries an aura of cultural volatility. And that aura doesn’t sell luxury. It repels it.

And the MAGA masses? They can’t afford it. Simple.

The product is still exceptional. The technology is still ahead. But marketing in 2025 isn’t about excellence alone. It’s about identity now. It’s about trust. And Tesla’s trust, with a key segment of the market, has eroded.

As the divide between humans gets larger in this country, brand identity can no longer cross aisles. I’m a left-winger who happens to have disposable income. I’m not buying those brands that the MAGA billionaires are wearing. And it’s fine with them because they never really liked seeing someone like me in them anyway. I didn’t dress like them, except in handbags and shoes, and I voiced my opposing opinion in ways that made them feel uncomfortable. They have their handbags, and I’ll have mine now. And never the twain shall meet.

We’re seeing this everywhere. Just look at what’s happening with “60 Minutes.” Their executive producer resigned, saying CBS had caved to political pressure. And already, people on both sides are talking about boycotting the show’s advertisers. Verizon hasn’t pulled out, and that silence is being read as a stance. This is the environment we’re in now. Brands don’t get to sit quietly anymore. Silence is a vote. They are going to have to take sides.

People are starting to want to buy from companies that reflect their values—or at the very least, don’t conflict with them. On the right, that means cutting ties with “woke” brands. On the left, it means not buying a car that, fairly or not, now feels like it comes with a campaign bumper sticker baked in.

That’s the issue. Not leadership hours. Not next-gen software. Tesla’s crisis isn’t internal. It’s cultural.

And no, Elon, returning to a full-time schedule and unveiling a few shiny updates isn’t going to fix it. Because what Tesla has lost isn’t just momentum. It’s narrative control.

And Tesla? Tesla doesn’t whisper anymore. It shouts. It polarizes. And even the most impressive engineering can’t outrun that.

Today, marketing isn’t about the product. Not anymore. It’s about identity. It’s about affiliation. And Tesla’s affiliation is getting harder to ignore—and harder to sell.

Take the time to stop and think about your identity and where you want to fall, and if your sales will be affected by your politics. The time is here. — Christine Merser

Christine Merser has been a leading marketing strategist for over thirty years, working with companies, politicians, and individuals to achieve groundbreaking success. Her innovative strategies and forward-thinking approaches have inspired others to redefine how they reach their marketing goals. Known for her curiosity, creativity, and ability to adapt to ever-changing landscapes, Christine continues to shape the future of marketing with fresh perspectives and actionable insights.