Elon Musk is no stranger to political controversy. The Tesla Inc. (NASDAQ:TSLA) and SpaceX (NASDAQ:SPCX) CEO was instrumental in President Donald Trump's re-election bid in 2024, and now he's gearing up for another political push. According to a report from the New York Times on Thursday, Musk plans to spend a hefty $100-$120 million to back at least eight GOP candidates in the upcoming midterm elections through his Super Political Action Committee, America PAC. The figure could change, but the intent is clear: Musk is doubling down on his conservative political involvement.
This isn't Musk's first foray into politics. In the run-up to the 2024 Presidential Election, he poured close to $250 million into Trump's campaign and endorsed him at several public events. After Trump's victory, Musk briefly led the Department of Government Efficiency (DOGE), a non-governmental organization aimed at trimming excess government spending. But his time in the White House was short-lived. Within months, public spats over policy disagreements on social media led to his departure. DOGE shut down, and Musk's ties to Trump and conservative politics have only deepened since.
Now, with the midterms on the horizon, Musk is targeting Senate races in at least five states: Alaska, Ohio, Iowa, Maine, and Michigan. He's also in talks about races in Texas, Georgia, and North Carolina, and has his eye on House races in California, Wisconsin, and Washington. The report cites anonymous sources familiar with the matter, and neither Musk, America PAC, nor the GOP have responded to requests for comment.
But here's the thing: Musk's political entanglements haven't been great for Tesla's bottom line. Last year, Tesla sales took a significant hit across multiple global markets, and Musk himself admitted in a recent interview with The Economist that he might have gotten "too involved" with politics. Cathie Wood, CEO of ARK Invest and a known Tesla bull, acknowledged that Musk's political activities had caused brand damage. Investor Ross Gerber of Gerber Kawasaki also criticized Musk's political moves. There were even reports of vandalism targeting Tesla vehicles and infrastructure following Musk's backing of Trump. Dan Ives, another bullish Tesla investor, suggested Musk needed to step back from politics and focus on the EV giant.
Meanwhile, Tesla's rival BYD Co. Ltd. (OTC:BYDDY, OTC:BYDDF) saw triple-digit sales surges in Europe, coinciding with Tesla's decline in that region. BYD's rise highlighted the growing presence of Chinese automakers in the European market.
But Tesla has rebounded since then. The Model Y has become a top-selling vehicle in multiple markets, and the company has seen sales boosts in Europe and China. However, Musk's political endorsements have also gotten further right. He's shared strong opinions on immigration and gender identity, and recently made headlines for criticizing director Christopher Nolan and his film "The Odyssey." Musk took issue with Nolan's casting choices, including Lupita Nyong'o, a Mexican-born actress of Kenyan descent, as Helen of Troy, and trans actor Elliot Page in the movie.
So, what does this mean for Tesla going forward? It's still unclear if Musk's latest political push will hurt sales again. But in one of the U.S.'s largest EV markets, California, Tesla could lose potential customers to rivals like Rivian Automotive Inc. (NASDAQ:RIVN) and Lucid Group Inc. (NASDAQ:LCID). Tesla hasn't confirmed whether it will join Governor Gavin Newsom's MyFirstEV program, which offers $3,000 discounts on new EVs and $1,750 on used ones for first-time buyers. Lucid and Rivian have already signed up, and the program applies to EVs priced below $50,000.
Musk's political ambitions are clear, but the question remains: will they cost Tesla again? Only time will tell.
