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Tesla (TSLA) CEO and the world's richest person, Elon Musk, has always been a polarizing personality, with an army of lovers as well as haters. Over the last year or so, though, the number of people in the anti-Musk camp seems to have increased, and that trend has only gained traction over the last few weeks. Here’s a look at why Musk is so disliked - and why he nevertheless remains the best bet to lead Tesla.
To begin with, it is almost fashionable to hate billionaires. For instance, when Amazon (AMZN) founder Jeff Bezos made his space trip in 2021, thousands signed an online petition on Change.org calling for him not to return to Earth. Former Microsoft (MSFT) boss Bill Gates also finds himself at the center of multiple conspiracy theories, including that he was responsible for COVID-19.
Musk is arguably even more polarizing than other billionaires, which is likely also due to his mass popularity - as exemplified by his ever-rising X followers, currently upwards of 164 million (over 30 million higher than Barack Obama, who held the top spot prior to Musk).
Why Do People Hate Musk?
Apart from the general distrust toward billionaires among a segment of the population, along with Musk’s popularity (which means both fans and haters), what makes Musk so widely disliked are his strong views - which, more often than not, are controversial.
The most recent instance is his support for an antisemitic tweet, which alienated advertisers on X and elicited a condemnation all the way from the White House. Notably, Musk was in Israel today with Prime Minister Benjamin Netanyahu in a well-publicized visit to discuss the ongoing conflict with Hamas.
But this is not the first such controversy related to Musk, and we can be sure that it won't be the last, either. Ever since he acquired Twitter (later renamed X), Musk has courted even more controversy – whether it is the reported increase in hate speech on the platform since his acquisition, or his restoration of several accounts previously banned for violating the platform's guidelines on inflammatory speech, including those of Donald Trump, Kanye West, and David Duke. While Musk is a self-proclaimed “free speech absolutist,” which was the reason he purportedly acquired Twitter, the views he defends are often the most extreme and polarizing.
Even Tesla Bulls Eye Musk’s Actions Critically
Some high-profile Tesla bulls – including Cathie Wood, who has set a base case 2027 target price of $2,000 on the stock – believe that Musk’s X antics are working to the detriment of Tesla investors.
In January, while speaking with Barron's, Wood said, “I think there are people who won't buy his cars now.” Her comment was made about two months after Musk’s Twitter acquisition closed. However, she did not tone down her bullishness for Tesla stock, and said it has “miles to run.”
Over the last month, some other long-standing Tesla bulls have also sounded apprehensive about the electric vehicle (EV) industry leader. In particular, Ross Gerber, president and CEO of Gerber Kawasaki Wealth & Investment Management, said that Musk’s actions are harming Tesla.
Gerber said that Musk has more or less “stepped aside” from Tesla and added, “I've never had this with any company I've invested in in my entire life, where the CEO does so many detrimental things that destroy the brand, because bottom line that's what's happening. It's absolutely outrageous, his behaviors and the damage he's caused to the brand.”
Many potential Tesla buyers, as well as existing Tesla owners, have also said on social media platforms that they won’t buy Tesla cars and will instead switch to other companies.
What’s the Outlook for Tesla Stock?
Notably, one of the reasons TSLA stock cratered 65% in 2022 was the perception that Musk was getting distracted due to his association with Twitter, at a time when Tesla needed more of his attention amid the EV price war and rising competition.
Fast forward to 2023, and the price war has only worsened - which has taken a toll on Tesla’s profit margins - while the controversies surrounding Musk have also increased.
However, when it comes to Tesla’s stock price, it hasn’t reacted to Musk's controversies the way it did in 2022. In fact, TSLA is still among the top 10 S&P 500 gainers.
Why Musk Still Remains the Best Bet for Tesla
Musk is not our usual “politically correct” business leader, and openly expresses his mind even if it means a fall in TSLA stock. We can be reasonably sure that his views will continue to create controversies over the next year as we get into the 2024 U.S. presidential elections, where he has vowed support to conservatives.
While there have been instances where boards have booted out founders – most recently with Sam Altman at OpenAI, however briefly – it would be fair to say that Tesla is better off with Musk at the helm of the company, even with all the controversies surrounding the CEO. Love him or hate him, Musk is the key moving part of the Tesla story, and if not for him, the company would not be the behemoth that it currently is.
On the date of publication, Mohit Oberoi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
