A groundbreaking study from Yale University economists has quantified for the first time how CEO Elon Musk’s partisan political activities directly damaged Tesla’s U.S. sales. The National Bureau of Economic Research working paper concludes Tesla would have sold between 1 million and 1.26 million additional vehicles from October 2022 through April 2025 without what researchers call the “Musk partisan effect“—representing 67% to 83% higher sales than actually achieved.

The findings provide hard academic evidence for what EV buyers have been experiencing firsthand: The study links sales declines to Musk’s increasingly partisan behavior, including substantial donations to Republican candidates and a reported advisory role in President Trump’s administration, which have alienated Tesla’s historically Democratic customer base while simultaneously boosting competitor EV and hybrid sales by 17% to 22%.

The Study’s Shocking Numbers

The Yale study’s findings reveal the massive scale of self-inflicted damage. The research team—Kenneth Gillingham, Matthew Kotchen, James Levinsohn, and Barry Nalebuff—analyzed county-level vehicle registration data across all EVs and hybrids to isolate the political impact.

The timing is particularly damning. The study period begins in October 2022, precisely when Musk acquired Twitter (later rebranded X), and extends through April 2025, covering his increasingly visible political activities. According to sources cited in the research, Democratic-leaning buyers who historically formed Tesla’s core customer base shifted purchases to competitors in nearly one-for-one substitution.

The researchers linked these declines to what they describe as Musk’s increasingly partisan behavior, including his political donations and advisory activities that surveys indicate have alienated environmentally minded Democratic buyers—historically Tesla’s strongest base.

California’s Zero-Emissions Goals in Jeopardy

The study delivers particularly troubling findings for California’s environmental ambitions. Researchers conclude the state would have met its 2026 zero-emissions vehicle targets “had it not been for the Musk partisan effect.”

According to data cited in reports on the study, Tesla registrations in California fell 9.4% in the third quarter of 2025, with the company’s market share dropping to 46.2% during that period. This represents a dramatic erosion from Tesla’s previous dominance in the state that accounts for roughly 40% of all U.S. EV sales.

The study employed county-level analysis showing the most pronounced declines in Democratic-leaning areas, validating patterns EVXL has documented showing steeper drops in progressive regions like the Bay Area.

Competitors Capitalize on Tesla’s Brand Crisis

While Tesla hemorrhaged sales, competitor automakers captured the defecting buyers. The study’s finding of “nearly one-for-one substitution” demonstrates that Musk’s politics didn’t dampen overall EV enthusiasm—buyers simply chose different brands.

Industry data from the same period shows General Motors and Ford making significant market share gains with competitive new EV models, while Tesla’s share declined. Those lost customers represent billions in foregone revenue for Tesla and a permanent transfer of market share to competitors who maintained political neutrality.

Tesla Board Downplays Political Damage

Tesla board Chair Robyn Denholm attempted damage control in a CNBC interview Monday, claiming the outside perception of Musk spending time in government “had diminished.” Her comments came as she urged shareholders to approve Musk’s controversial compensation package ahead of the November 6 annual meeting.

The study notes sentiment toward Tesla improved somewhat as Musk shifted company focus toward robotaxis, self-driving technology, and humanoid robots. However, this marginal sentiment improvement appears small compared to the million-plus vehicles lost to political alienation documented in the research.

Tesla did not respond to requests for comment on the study’s findings, according to reports.

EVXL’s Take

This Yale study finally puts hard numbers to the brand implosion EVXL has been documenting since late 2024. When we first reported on Tesla’s identity crisis in November 2024, anti-Musk sticker sales were already spiking 800% as owners tried to distance themselves from their CEO’s politics. By May 2025, marketing professor Scott Galloway was calling it Tesla’s political brand crisis, noting the company had plummeted from the 8th most reputable brand to 95th.

The California data is particularly damaging because it validates our May reporting on how Tesla’s sales drop threatened the state’s EV goals. A 21% first-quarter decline in the state that drives U.S. EV adoption isn’t just a Tesla problem—it’s an environmental policy disaster.

Europe told the same story. Our coverage tracked Tesla sales plunging across European markets despite a refreshed Model Y launch—86% down in Sweden, 62% in the Netherlands, 52% in Denmark. French owners even sued Tesla over Musk’s political activities, citing steep sales declines in that market.

What makes this academic study so valuable is it isolates causation through rigorous county-level statistical analysis. Tesla bulls have tried blaming increased competition, market saturation, aging products—anything except Musk’s politics. This research cuts through those excuses with data showing the sharpest declines precisely where Democratic voters dominate.

The million-vehicle loss represents roughly $50 billion in foregone revenue at average Tesla transaction prices. More importantly, those buyers didn’t abandon EVs—they chose Chevrolet, Ford, BMW, and Mercedes instead. That’s permanent market share transfer that no robotaxi pivot will recover.

Tesla’s trajectory proves a brutal lesson: when your customer base buys EVs for environmental reasons, aligning with politicians who oppose climate policy is corporate suicide. The board can beg shareholders to approve massive pay packages, but no compensation structure fixes a CEO who actively repels his own customers.

What do you think? Can Tesla recover from this self-inflicted brand damage, or has Musk permanently alienated the EV-buying demographic? Share your thoughts in the comments below.