"The monstrous alliance between Tesla CEO Elon Musk and Donald Trump seems to have sparked antipathy among many Europeans. Import duties, support for far-right European political parties, a Hitler salute and undisguised EU hatred have not done the reputation of the richest man on earth any favour. Partly as a result of this, European sales of Teslas (now also known as swasticars) fell by 43 percent in the first two months of the year (compared to the same period last year), while sales of electric cars in Europe increased by 31 percent across the board.
Some European motorists who already owned a Tesla are becoming uncomfortable. In the United Kingdom, a record number of second-hand Teslas are now being offered for sale, and in the Netherlands it seems that 40 percent of Tesla drivers are ‘a little ashamed’ and 31 percent would like to get rid of their Tesla. The American protest movement Tesla Takedown is also organising protests at Tesla showrooms in Europe. Less legitimately, Tesla cars are also increasingly the target of vandalism.
Listed tech giants are sensitive to reputational damage
The effect of the worldwide anti-Tesla movement should not be underestimated. Due to the damage to its reputation, the price of Tesla shares has plummeted by more than 45 percent since the end of last year. This could get Musk into trouble, for example because he uses Tesla shares as collateral for loans. If his shares lose even more value, the banks may demand that he sells them (in part). This will cause the price to drop even further, which will hamper his ability to obtain new financing. A falling Tesla share price could therefore send Musk into a negative spiral.
The fact that Trump recently felt compelled to publicly buy a Tesla from Musk on the White House driveway and that Musk urged employees not to sell their Tesla shares shows how important Tesla's share price is to Musk. Trump and members of his administration may have accepted the temporary drop in the stock market because they are in the middle of a ‘transition period’, but the question is how long Musk and the other tech billionaires can bear this pain.
This is good news for Europe, now that the American government and tech giants are putting pressure on our democratic constitutional state. It shows that European citizens can stand up to these oligarchs through consumer behaviour and activism.
Don't become more sustainable at all costs
In addition, the anti-Tesla sentiment is a warning to European leaders who are rushing to make our economy more competitive and sustainable: don't do this according to the American model. Make sure that all power does not end up in the hands of a few large private (tech) companies, allowing non-democratically elected figures such as Elon Musk to have de facto control. And pay close attention to who benefits from the sustainability transition. So no subsidies for overpriced, oversized and overweight electric cars like the Tesla, but rather start small and support the less well-off citizen.
By working carefully and with respect for the constitutional state, you distinguish yourself from authoritarian leaders who are increasingly calling the shots in more and more places. Last month we already got a taste of the reward that can follow if you stand up for democratic values: the European stock markets had the highest influx of foreign money in a decade.
The European Tesla embarrassment is therefore by no means gratuitous. It sends a clear message that we as Europe will continue to fight for the democratic constitutional state and that we can indeed hurt those who attack our values. "
This column was originally published in Dutch on Financial Investigator