Tesla bull highlights the worst thing to ever happen to its brand

Though 2023 has proven to be a far better year than 2022 for Tesla  (TSLA) - Get Free Report with the company's release of the Cybertruck, continued dominance in the electric vehicle sector and a generally strong stock performance, the company is not free from volatility. 

A significant factor behind that volatility is its CEO, Elon Musk. A July poll of 7,000 Tesla Model 3 owners found that the bulk of those surveyed who sold their Teslas did so because of disapproval of Musk and displeasure with the perception of Tesla's brand. 

Investors last month criticized Musk for a series of anti-Semitic tweets, with some, like Ross Gerber, the co-founder and CEO of Gerber Kawasaki Wealth and Investment Management, noting a harsh reaction from his clients. 

Related: Investors have finally had enough of Tesla CEO Elon Musk

"Getting a flood of messages from clients wanting out of Tesla and anything to do with Elon Musk," he wrote in a now-deleted post on X. "Many saying they are selling their cars as well. What is he doing to the Tesla brand??!!?!"

Though the stock has since risen from that point, investor concerns over Twitter persist. 

A Tesla-focused account on X — James Cat — highlighted in a Wednesday post several main factors that, combined, have impacted Tesla's demand and profit. One of these is the fact that the early adopters of EVs have already been satiated, leaving the masses cautious and uncertain, something he said could be solved with an "aggressive PR campaign." 

One of the other main factors that the user said have impacted demand is Musk's purchase of and subsequent actions on Twitter, something that has alienated a portion of Tesla's progressive-leaning demographic. 

Related: Here's the full story behind electric vehicle adoption

Twitter's impact on Tesla

Indeed, a July Pew Research survey found that 56% of Democrats and Democrat-leaning independents were very or somewhat likely to consider buying an EV. Only 20% of Republicans and Republican-leaning independents were likely to purchase an EV, whereas 70% of that demographic are not at all likely to purchase an EV. 

"The Twitter acquisition and Elon’s use of it since has been the worst thing to happen to Tesla’s brand…ever," James Cat wrote. "Elon is more than Tesla’s CEO; he is also the face of the brand. Like it or not, his brand and Tesla’s brand are linked, for better or worse."

Gary Black, managing partner of the Future Fund and a Tesla bull with a $300 price target, said in response that he generally agrees with that perspective of Musk's impact on the brand. 

"Even if you don’t agree, it will help you understand the Tesla pro-brand investment perspective in which I and other long-term Tesla bulls find ourselves," Black said. 

Musk recently reinstated the account of right-wing conspiracy theorist Alex Jones before hosting a Twitter Spaces interview with him and several other personalities — Andrew Tate, a self-proclaimed misogynist, Jack Posobiec, a conservative conspiracy theorist, 'proud Islamaphobe' Laura Loomer and Republican presidential candidate Vivek Ramaswamy. 

Black's opinion is not a new one. 

Strategic Vision's annual Brand Equity Index, released in December 2022, highlighted the fact that Musk's acquisition of Twitter, followed by his decision to reinstate banned users and loosen restrictions, had a "direct impact on his image and that of Twitter and Tesla." 

“These problems are magnified in that battery electric vehicles (BEVs) are more often purchased by self-identified Democrats who have generally opposed Musk’s actions with Twitter," Strategic President Alexander Edwards said at the time. 

"It will become more difficult to sell Tesla vehicles as the narrative of Twitter makes the vehicles seem less Fun and alienates the primary buyer," he added. 

Shares of Tesla lifted roughly 4% Thursday. 

Related: Jim Cramer says that Elon Musk has a 'mental condition'

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