Tesla's Political Tangent: Can Elon Musk Drive Back to Brand Brilliance?

Tesla shares rose as Elon Musk reduced his government involvement, focusing more on Tesla. However, political ties have damaged Tesla's brand, affecting sales. Despite plans for an affordable model, Tesla faces revenue declines and brand challenges, amid shifting trade policies and expected production delays.

In a surprising move, Elon Musk announced plans to scale back his governmental engagements, prompting a 6.5% surge in Tesla's premarket share trading. By reducing his advisory role to U.S. President Donald Trump, Musk aims to refocus on Tesla, generating optimism among investors.

Despite this shift, Tesla's brand image remains tarnished, largely due to Musk's controversial political affiliations, leading some consumers to distance themselves from the brand once synonymous with climate-friendly innovation. Experts warn that political baggage might overshadow Musk's renewed attention to Tesla.

The financial outlook that includes a 71% drop in net profit and a 20% decline in automotive revenue compounds the challenge. With plans for an affordable model by 2025, Tesla must navigate complex international trade dynamics and rekindle its brand appeal to ensure future growth.

(With inputs from agencies.)