Topline:
President Donald Trump bought a Tesla and turned the White House lawn into a showroom in an extraordinary bid to boost sales for Elon Musk — his biggest financial supporter — as his company’s stock plummets. But that’s only likely to speed up Tesla’s decline in liberal California.
State of play: Public distaste for Musk has turned into outright fury in recent weeks, as the extent of his role in slashing the federal government and supporting conservative parties abroad has become clear. Protesters have disrupted Tesla showrooms from San Francisco to Portugal, and an Oregon man was arrested last week after throwing Molotov cocktails at a dealership.
Outrage has spooked the stock market: Tesla shares are down 50% since mid-December, wiping out $800 billion in value. Mike Murphy, a veteran Republican consultant who runs a group that supports increased electric vehicle adoption, said that a quarter of collapsing sales could lead to shareholder lawsuits.
Why it matters: Tesla, the dominant automaker in California’s electric vehicle market, has watched its hold rapidly slip in recent years. The company’s California sales fell by 11.6% last year compared to 2023, and it now represents 52% of the state’s EV market — which accounts for 35% of national sales — down from nearly 80% four years ago. Tesla’s decline could open a window for American automakers and foreign companies like BMW, Kia and Hyundai to fill the gap.
Conservative response: Trump’s biggest supporters in the media world praised the move, and urged conservative viewers to buy a Tesla of their own. Fox News host Sean Hannity announced on X that he ordered a new Tesla and launched a contest to give away a model. Musk also quickly thanked the president.
Federal uncertainty: The Trump administration hasn’t announced if it plans to roll back a number of federal programs that could upend the EV market, possibly to Tesla’s benefit. That includes a $7,500 EV tax credit that Musk has pledged to axe. Biden-era Inflation Reduction Act incentives for EV battery manufacturing are also still intact, and got harder to kill last week as nearly two dozen House Republicans announced their opposition to nixing clean energy credits to pay for tax cuts.
For more, read the full story in POLITICO's California Climate newsletter.
This story is published in partnership with POLITICO.