Tesla’s Brand Repositioning Problem
Elon Musk and Tesla are in the news. Musk, for leading Donald Trump’s DOGE effort, and Tesla for its weak sales and slumping stock, recently down more than 50% from its peak.
Tesla clearly has a sales problem. The scarier part: it has a massive branding problem.
Brand Repositioning
Brands are the associations linked to a name, mark or symbol. When you see Apple, you might think technology, simplicity, iPhone and Steve Jobs. That is the brand.
Repositioning is when a brand takes on new and different associations. A brand known for low-price and value becomes known for quality. A brand associated with athletic achievement takes on associations related to fashion and luxury.
Marketers love to plan repositioning efforts, but often the initiatives don’t work out. With well-known brands, associations tend to stick. Creating new ones is difficult and usually requires a massive investment.
In some cases, a repositioning effort leads to the end of a brand. By trying to shift associations, the brand leaders drive away existing customers and fail to attract new ones. This is what happened to Oldsmobile with its ill-conceived repositioning effort, “This is not your father’s Oldsmobile.”
The Tesla Brand
Tesla is a remarkable brand. In recent years, it was a brand associated with technology, luxury, performance and environmental responsibility. Elon Musk was part of this, too, in his role as gifted and innovative technology leader. People who drove a Tesla were the masters of the universe: wealthy, tech-savvy and green.
The green part was always a stretch; if someone really wanted to be environmentally responsible, they wouldn’t buy a Tesla; they would get a bicycle.
Still, to drive a Tesla was to be a high-status person.
Tesla’s Repositioning
In 2025, Tesla is undergoing a repositioning; it is taking on new associations.
The reason is obvious: Elon Musk is front and center on the global stage, leading Donald Trump’s effort to cut the size of the Federal Government. And Musk is closely linked to Tesla.
This week, Musk and Trump appeared together at the White House with a bright red Tesla. The photos and headlines further cemented the link between Trump, Musk, DOGE and Tesla. In case anyone didn’t know about the connection, photos clarified it: Trump, Musk and Tesla.
The Problem
Is this good for the Tesla brand? No, it isn’t.
There is a reason most brands try to stay out of political debates. It is hard enough to get a customer. The last thing you want to do is drive them away by getting involved in issues unrelated to your business.
Tesla now represents the Trump administration and DOGE. People are protesting at Tesla dealerships and attacking people who drive a Tesla. Some people are trying to unload their Teslas, but this isn’t easy.
So where are we now?
Would a Democrat buy a Tesla? No.
How about someone who has been impacted by the DOGE cuts? No.
Someone concerned about the environment and global warming? In a bizarre twist, no.
And here is the crux of the issue. Tesla’s sales to date have been highest in many blue states, including California, Washington, and New York. Buyers in these states will now think twice.
To maintain sales momentum, Tesla needs to pick up sales in red states: Texas, Louisiana, Georgia. In theory, Tesla’s new associations with Trump and DOGE should be appealing to people in these areas.
But are people in Texas and Louisiana going to buy dramatically more Teslas? No. There is no way that Tesla will see a sales boost in red states that offsets the sales decline in blue states.
Even Worse
The biggest problem is that the Tesla brand is now stuck with its polarizing associations.
The only way to drop negative associations is to replace them with new ones, going through another repositioning. Left alone, brand associations remain.
Can Tesla ever generate publicity and attention equal to the recent frenzy around Trump, Musk and DOGE?
I suspect not. If Musk leaves the administration, he won’t receive much attention. So, the brand associations that he created during his time in the spotlight will stick.
The Outlook
Tesla’s sales were down 1% in 2024. The decline will accelerate in 2025 given Tesla’s branding problems.
My prediction: Tesla will perform poorly and become an acquisition target in the next few years.
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