Al Root

It's March 29, which the organizers of Tesla Takedown called a global day of action to protest and "stop" CEO Elon Musk peacefully.

As it relates to Musk, what protestors want to stop are, or likely are, DOGE cuts. Musk is the de facto leader of President Donald Trump's Department of Government Efficiency, which has been rankling political partisans since Trump's Jan. 20 inauguration.

Musk has been far more aggressive than politicians are used to, pointing out in interviews that actions are far more effective than reports. The speed of cuts has surprised many, and some of the cuts have been challenged successfully in court.

Practically speaking, the protestors are unhappy with the early days of the second Trump administration, and the close relationship between Trump and Musk has made Tesla a political symbol.

"The last thing you want, whether you are red, blue, [or] purple is for Tesla to become a political symbol," said Wedbush analyst Dan Ives.

That's his wish, but for now investors need to judge the short- and long-term impact of protest on Tesla sales.

Politics seems to be turning off some of Tesla's core customers -- politically left-leaning people looking to go green. Weak sales data in the U.S. and Europe to start the year left Wall Street no choice but to cut first-quarter sales estimates that are due to be released April 2.

According to the most recent analyst numbers, Tesla is expected to deliver 360,000 to 370,00 cars. That's down from estimates of about 420,000 to start the year. Tesla delivered about 387,000 cars in the first quarter of 2024, so the expectation has gone from growth to contraction.

Investors should always remember that the stock market is forward-looking. Through Friday, Tesla stock has declined about 38% since the Jan. 20 inauguration, wiping out more than $500 billion of its value.

Tesla has faced protests for weeks. Some haven't been peaceful. A lot of that already is reflected in the stock. Future Fund Active ETF co-founder and Tesla shareholder Gary Black believes anything around 360,000 vehicles sold in the first quarter should be good enough to support the stock at current levels.

As for the protests Saturday, none were really close enough for this Barron's reporter to attend. I called several dealerships and responses ranged from an abrupt hang-up to polite conversations acknowledging some recent protest activity.

I live in a coastal town in a state that went 56% to 42% for Kamala Harris, and where Tesla vehicles are ubiquitous. (I own a rear-wheel-drive long-range Model Y). All the dealerships I called were in states that went to Harris.

I found one local protest -- about five people with signs ranging from clever to profane. Trump and Musk both were targeted.

The person-on-the-street approach didn't yield much insight. One good resource for a real-time sense of protest activity is X, which ironically, Musk owns and just sold to his artificial-intelligence company xAI.

X shows some reasonably well-attended protests in Michigan and London. It also demonstrates that protest activity has been happening for weeks.

Most Wall Street analysts currently believe that Musk's political turn has done damage to Tesla's brand. Now, investors need to determine whether the damage is permanent or if Musk will change behavior to lessen any negative associations.

It comes down to Musk. He "is Tesla and Tesla is Musk" said Ives, who would prefer if Musk spent a little more time in Austin, Texas -- at Tesla headquarters -- than in Washington, D.C.

Many investors probably feel that way. Whether Musk will adapt or dig in is anyone's guess.

Through Friday, Tesla stock has fallen about 46% from all-time highs reached in mid-December. Shares remain up about 50% over the past 12 months, about 44 percentage points better than the S&P 500.

Write to Al Root at allen.root@dowjones.com

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March 29, 2025 14:30 ET (18:30 GMT)

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