The consequences of an outspoken CEO on full display
Tesla has lost its position as the world’s top electric vehicle (EV) manufacturer to Chinese rival BYD, after a year in which customer backlash against Elon Musk’s political activities collided with intensifying competition and policy shifts.
Many are linking part of Tesla’s sales slump to a customer revolt over Musk’s increasingly right‑wing political stance and public behaviour.
For HR and people leaders, this is more than a business story. It is a case study in how a CEO’s personal politics and conduct can damage brand equity, employee morale, and long-term competitiveness.
From EV pioneer to number two
Over a quarter of all global new car sales in 2025 were EV, according to an Ember study. Despite this, Tesla’s sales declined while BYD surged ahead.
BYD sold 2.26 million EVs throughout the year, outpacing Tesla’s 1.63 million sales.
This was an 8.6% drop for Tesla; in a year its CEO was plagued with controversy.
Trouble began early in the year, when on 20 January, Musk was accused of gesturing a Nazi salute twice at a rally celebrating Donald Trump’s second presidential inauguration.
The year continued to see a partnership between the Tesla CEO and the US president which outlets are claiming heavily contributed to the drop in car sales.
While there are other factors at play, such as technology, pricing, and policy, one element stands out for HR professionals: the specific role of the CEO’s public political identity in eroding customer and, by extension, employer brand loyalty.
When a CEO’s politics become a business risk
Reports explicitly link Tesla’s sales pressure to public unease about Musk’s politics and visibility in polarising debates.
Some have contributed the loss of Tesla’s crown to a “customer revolt” over Musk’s right‑wing politics and stiff competition.
This culminated in a trend of people purchasing “I Bought This Before We Knew Elon Was Crazy” stickers for their Tesla, while others had their cars de-badged to partially remove some of the company’s branding in a bid to distance themselves from Musk’s bahaviour.
From an HR standpoint, this matters because employee values and expectations have shifted. Many employees, particularly younger cohorts, expect their employer’s leadership to align with or at least respect broadly inclusive values.
Highly partisan or inflammatory public stances from the CEO can create internal cognitive dissonance and disengagement.
On top of that, as made evident in Musk’s case, employer and consumer brands are now tightly coupled.
Talent chooses employers partially based on brand reputation and perceived social stance. Customer boycotts or social media campaigns that target leadership behaviour often spill over into how attractive the company is as a place to work.
When a CEO’s political positions dominate headlines, they can overshadow the company’s stated values, DEI commitments, and people strategies – fairly or unfairly.
In Tesla’s case, the story is not simply that Musk has opinions; it is that his sustained, highly visible political engagement has become part of the Tesla story in a way that some customers and stakeholders are actively rejecting.
Lessons for HR leaders and boards
HR cannot and should not control executives’ private political beliefs. But HR and boards can shape how those beliefs intersect with the organisation’s brand, people strategy, and risk appetite. Leadership behaviour should be seen as a core business risk.
Issues can be avoided by defining clear expectations for executives’ public conduct.
Tesla’s loss of the EV crown to BYD is not just a story about pricing, policy, or Chinese competition. It is also a warning about how fast brand equity can erode when a company’s leading figure becomes as famous for his politics as for his products – and how that erosion can show up in both the customer and talent markets.
For HR leaders, the message is clear: CEO behaviour is part of your people strategy, whether you plan for it or not.
Political neutrality is no longer the default state; silence, visibility and alignment all carry consequences.
Robust governance, clear expectations, and active listening are essential to protect your employer brand in an era when one executive’s feed can reshape the company’s future.
