It seems like Elon Musk, the CEO of Tesla, has always been in the spotlight for one reason or another. He has made plenty of controversial statements and actions, but his most recent actions surrounding the COVID-19 pandemic could be the most impactful for Tesla’s long-term outlook. Musk has been adamant in downplaying the severity of the pandemic, despite the global financial crisis it has created. The problem is his words and actions could alienate Tesla’s main customer base, wealthy and educated coastal liberals. Investors should keep a close eye on how this plays out when considering investment opportunities with Tesla.
Timeline Of Elon Musk’s Comments And Decisions
When the COVID-19 pandemic was beginning in March 2020 and market volatility was peaking, Musk was very outspoken about downplaying the potential severity of it. He did not shy away from criticizing public officials about the stay-at-home orders implemented and even went as far as saying the orders infringed on the rights of people’s freedom. In May, Musk violated local shelter-in-place orders by re-opening the Tesla factory in Fremont, California. By doing so, he was willing to risk being arrested just to make a statement and go against the grain.
Alienating The Primary Customer Base Of Tesla
While Musk has made some questionable financial decisions during his tenure as CEO of Tesla, they have never amounted to customers alienating him or the Tesla brand. The primary customer base for Tesla includes wealthy liberals in coastal states who are highly educated. By stirring up controversy amid a global pandemic, he’s risking alienating his main customer base who may believe the stay-at-home orders were valid from a public health perspective. In a world where a high-profile person’s public opinion matters so much, Musk’s opinions are so far against the general public that customers may take their business elsewhere if they don’t agree with him.
Future Outlook For Tesla
The financial crisis created by COVID-19 is bad enough, but Musk could be creating long-term financial harm for Tesla with his actions. The timing is concerning because of technological advancements creating more competition than ever before. In past years, there would have had to be a significant amount of controversy for customers to alienate the brand, simply because Tesla did not have any legitimate competition. Tesla has decreased the price of some of its models recently to help maintain sales during the financial crisis in the short-term. However, the alienation of the main customer base could be the biggest long-term concern for the future outlook for Tesla.
Tesla has always provided interesting investment opportunities for investors. The high-risk investment has always seemed like the potential for a high reward was worth it. However, the next several months will be critical for the future outlook for Tesla to see if they can maintain the growth they’ve experienced in recent years. Stock Investing Info is here to help you make the best investment decisions for your portfolio, so contact us today if you have any questions or need any investment advice.