Elon Musk's Sexual Harassment Allegations And Anti-Democratic Statements Affect Tesla

Elon Msuk always makes controversial news. (photo: twitter @jairbolsonaro)

JAKARTA - Elon Musk has defamed himself and Tesla with recent allegations of sexual harassment. While the global conglomerate has dismissed the allegations, saying the allegations are untrue, the repercussions could still hurt the brand in the eyes of some car owners and employees.

Musk on Thursday, May 19 denied reports by Business Insider that he sexually assaulted a flight attendant on a private jet in 2016. He also called the person making the claim a liar.

The day before, the Tesla CEO was in the midst of a controversial attempt to buy Twitter Inc., said his political orientation. He said he would vote for Republicans over Democrats and called Democrats a "party of division and hatred."

The attacks against me should be viewed through a political lens – this is their standard (despicable) playbook – but nothing will deter me from fighting for a good future and your right to free speech

— Elon Musk (@elonmusk) May 20, 2022

As a result of these issues Tesla shares were cut this week from the widely followed S&P 500 ESG Index on other exchanges. According to one executive, the index's decline was caused by a variety of issues including claims of racial discrimination within the company and accidents related to Tesla's vehicle products.

Musk responded by calling such ratings around environmental, social, and governance (ESG) a "fraud," and questioning how the index could bring down the electric car company. Tesla itself could not immediately be reached for comment.

Musk has previously made headlines that garnered attention, as he once referred to a critic as a "pedo guy" on Twitter. It's the latest controversy that has again raised the question of whether his directness will tarnish his fondness for him.

Musk himself is considered very attached to Tesla, so everything about him, could be detrimental to Tesla's car sales, especially in California.

This left-leaning state is Tesla's biggest market. In fact, nearly 40% of the company's retail sales last year came from there, according to Experian data. Tesla sales in California are up nearly 70% on the year and have a 6.5% share of all vehicles in the state, according to the California New Car Dealers Association.

The hashtag #BoycottTesla was a trending topic on Twitter on Friday, May 20th and several people claimed they were canceling their car orders.

"In the past, I admired him for working to build a transformational green business in the use of energy. But unfortunately he became a divider as an attention-seeking troll and I no longer believe that he is dedicated to the quality of his products. Cancel my Tesla order," said J. Yeh, a Twitter user who describes himself as a lawyer who has lived in several cities including Los Angeles.

"You lose a prospect," said a Twitter user named Ute Bauer from Germany, adding in German. "To anyone reading this, cancel your order," he said.

But so far Reuters has not been able to confirm whether Tesla's order has actually been canceled due to the controversy.

Many institutional investors may back Musk no matter what given the company's strong performance, but that doesn't mean some of them aren't frustrated right now.

"They're doing a lot of good stuff," said Taylor Ogan, CEO of Snow Bull Capital, which owns Tesla. "Only disappointing when it was marred by Elon Musk's antics. Elon Musk was the best thing for Tesla and the worst thing for Tesla."

A Tesla employee, who asked not to be named, voiced frustration that Musk's efforts outside of Tesla appeared to be hurting the automaker's stock. "Companies need to do something about this problem," he said.

On Friday, Tesla shares were down nearly 9%, falling about $66 billion from Tesla's market value and putting the stock at its lowest level since last August. Some analysts cited a "disruption risk" from the Twitter deal. Musk assured people last Thursday that Tesla was always on his mind.

To be clear, I'm spending <5% (but actually) of my time on the Twitter acquisition. It ain't rocket science!Yesterday was Giga Texas, today is Starbase. Tesla is on my mind 24/7.So may seem like below, but not true. pic.twitter.com/CXfWiLD2f8

— Elon Musk (@elonmusk) May 19, 2022

“If discussions around water coolers in the workplace focus on sexual harassment claims against Musk rather than Tesla products, the end result could be “corrosive” for the Tesla brand,” said John Smith, former group vice president at GM who runs global product planning.

"Tesla and SpaceX employees may also be "a little confused and angry" by Musk's anti-Democratic comments, because tech company staff in California tend to be more liberal," said Jason Stomel, founder of tech talent agency Cadre.

Bill Nelson, the administrator of NASA, which relies on Musk's SpaceX to fly its astronauts into space, told Reuters last Thursday that Musk has a strong executive team at the spacecraft maker and the agency's partnership with the company "is going without a hitch."

But Musk still has a lot of fans online. Twitter user @JVega103 says he's a Tesla-owned Republican and recently signed up for Tesla's solar panels. "Thanks for everything you do," the user tweeted.

It has left some industry watchers wondering whether Musk and Tesla will ignore this latest controversy, as they have in the past.

"Is Elon Musk now mad, or mad as a fox? He has the benefit of the doubt because he used to play chess a lot when we all played chess," said Northwestern University professor Erik Qualman. "As Musk himself said on 'Saturday Night Live', 'What, you think I'm going to be normal?'"