how Tesla Go from the world’s fastest-growing automaker to a company with slowing sales and shrinking market share? According to a team of Yale researchers, the answer lies in the polarization and biased behavior of CEOs Elon Musk.
Certainly, Tesla faces headwinds from aging models, growing competition and a saturated customer base. But an analysis of county-level data shows that its declining demand is also linked to Musk’s growing political activity. The study’s authors estimate that Tesla has sold between 1 million and 1.26 million more cars in recent years, which they “Musk bias effect“
In the most recent quarter, Tesla profit submerged 37 percent a year. Revenue has fallen for two consecutive quarters this year. (The most recent quarter saw a rebound for the tax credit-fueled rush.)
Yale researchers argue that much of Tesla’s decline stems from alienation from its traditional consumer base. Drawing on vehicle registration data from S&P Global and county-level voting records, they found that Tesla’s customer base has long leaned toward being Democratic and environmentally conscious.
That started to change in 2022, when Musk acquired X and rolled back content moderation policies. This shift deepened between his participation in the 2024 US presidential election and his appointment as head of the Trump administration’s Department of Government Efficiency (DOGE). “Musk’s actions antagonized his most loyal customer base,” the authors wrote.
The trend has only become more pronounced. Between October 2022 and April 2025, Tesla could lose 67 percent to 83 percent of its potential car sales due to Musk’s biased behavior, according to the study. In the first quarter of 2025 alone, this number increased to 150 percent.
Kasturi himself acknowledged the reaction. During an April earnings call, he said he had a DOGE role leading to “blowback”. and announced plans to reduce his time with the agency to refocus on Tesla.
The fallout didn’t even benefit Tesla’s competitors. Absent Mask’s biased behavior, sales of other EV and hybrid models would fall 17 to 22 percent over the past three years and down 25 percent by early 2025, the study found, suggesting his actions helped rival automakers.
Musk’s controversy also had unintended policy consequences, the researchers noted. In California, which targets 25 percent of new sales for zero-emission vehicles by 2026, 68 percent by 2030 and 100 percent by 2035, progress has stalled. The study estimates that without Musk’s biased effect, California would have added 139,700 EV sales in the first quarter of 2025. The reality is California 28,000 vehicles fall short For staying on track that quarter.
This study highlights how influential a CEO’s biased actions can be,” the authors conclude.
