November 25th, 2021, Christien Pheby
When Elon Musk tweets, markets move. Over the past few years, the mercurial CEO has used the social media platform to promote cryptocurrencies, pick up fights with unions, and accuse a British cave rescue volunteer of paedophilia.
In November 2021 alone, Musk has cast doubt on his company’s reported mega-deal with Hertz (halting the stock’s rally in US markets) and asked his Twitter followers whether he should sell 10% of his stock in Tesla (before proceeding to do just that). As unpredictable and widely condemned as these interventions are, it’s worth asking if they have a larger effect on perceptions of Tesla as a company.
Data from YouGov BrandIndex shows that in the UK, the US, and Germany, Tesla’s Index scores (a measure of overall brand health) didn’t change much between November 1 – when Musk tweeted about the Hertz deal – and November 9. The UK saw a slight decline from 8.6 to 8.3 (-0.3), the US saw a slight increase from 8.4 to 9.1 (+0.7), and Germany saw an increase of 2.1 points from 4.0 to 6.1. No remarkable movements in either direction, and if we zero in on metrics such as Reputation (a measure of whether consumers would be proud or embarrassed to work for a brand) in the US, scores more than doubled over the same period from 8.8.to 20.8. (+12). While it may not have been directly related to Musk’s recent tweets, neither do they appear to have caused significant damage.
Can we say the same of his other outbursts?
From “pedo guy” to present: Tesla’s brand health since Musk’s infamous cave diver tweet
The years since Musk’s “pedo guy” tweet have not been especially hard on Tesla’s brand health. Looking at brand health between 1 July 2018 (with a four-week moving average) and 1 November 2021 shows that Index scores jumped from 7.7 to 10.1 (+2.4) in the UK, from 6.4 to 6.8 (+0.4) in the US, and from 1.7 to 3.3 (+1.6) in Germany (where electric cars are perhaps more divisive than they might be in other markets).
Looking at Reputation scores also reveals an improvement in the UK from 18.8 to 23.9 (+5.1), while German scores rose from 8.3 to 11.9 (+3.6). Only in Tesla’s native United States has its reputation declined, with scores slightly falling from 18.7 to 17.4 (-1.3).
If the brand’s mild underperformance in the States is disappointing, it could take some comfort in the fact that Consideration scores in America doubled over the same period – leaping from 5.4 to 11.1 (+5.7) – and in the UK, where they increased from 4.7 to 9.5 (+4.8). Germany also saw an improvement of 1.9 (from 4.2 to 6.1).
In all of these metrics, Tesla performs worse in Germany where, according to YouGov Profiles data, drivers are least likely to consider the brand an innovation and technology leader compared to consumers in other countries (Germany 30%: GB 31%; US 32%). Here they are also less likely to say their next car purchase will be an electric car (Germany 16%; GB 20%; US 22%). So, the relative underperformance may have more to do with Tesla’s status as an electric car manufacturer in a country where the manufacture of petrol and diesel cars is a major contributor to the economy than anything its CEO posts on Twitter.
2018-2019: Cave troll
Zeroing in on July 2018-July 2019 (a 12-month period where Musk’s tweets twice earned a stern rebuke from the US Securities and Exchange Commission) shows how the posts affected Tesla’s brand over a shorter timeframe.
On July 15, Musk issued the “pedo guy’ tweet, and on August 8, he tweeted that he had “funding secured’ to take Tesla private at $420 a share – which the SEC alleged was a “marijuana culture reference” designed to “amuse” his girlfriend.
Between July 15 and September 15 2018, Tesla’s Index scores dropped from 6.7 to 4.0 in the UK (-2.7), from 6.3 to 4.4. in the US (-1.9), and from 3.9 to 2.9 in Germany (-0.8).
But if overall brand health only saw small declines, Reputation scores took a more substantial hit in each market. In the UK, they fell from 17.5 to 12.8 (-4.7), in the US from 18.1 to 14.8 (-3.3), and in Germany they deteriorated from 11.6 to 8.1 (-3.5).
Scores across this metric didn’t fully recover until November 28 2018 in the US (+18.1), February 18 2019 (17.8) – two days before another tweet earned a further rebuke from the SEC – and December 27, 2019 in Germany (11.7).
A saga investors could have done without? Perhaps. But while the unfortunate tweets seem to have had a short-term impact on brand health and reputation, consideration was largely unaffected. Between July 15 and September 15, 2018, scores stayed exactly the same in the UK (4.9) and the US (5.8): seeing a one-point decline in Germany from 4.9 to 3.9. This suggests that, if Musk’s tweets registered with the public, they weren’t enough to put them off Tesla in the months after each controversy.
It’s a similar story when he tweets that Tesla’s stock price is too high and he’s selling all his physical possessions in May 2020: the media writes about it, investors panic, and a month later Consideration scores are mostly unchanged.
They may be much-reported and much-discussed, and they may have an outsize short-term impact on Tesla’s stock price – but the effect Elon Musk’s outbursts have on Tesla’s brand health and reputation does not last, and its effect on consideration appears negligible.
If the CEO’s social presence doesn’t register too strongly with the public when it comes to buying cars, news like the (potential) Hertz deal might – and our data shows Tesla could see real commercial benefits from serving the rental market. Comparing Americans who rented a car in the past 12 months to US drivers overall reveals that the former have higher Consideration scores (13.4 vs. 10.5 – November 1), Quality scores (27.7 vs. 13.5), and Impression scores (22.9 vs. 7.2) for the brand. It’s a consumer group with a higher opinion of Tesla than average, and one that it’s now better able to address.
Auto
Receive monthly topical insights about the auto industry, straight to your inbox. Sign up today.
Discover more Automotive content here
Start building a survey now with YouGov Direct
Methodology: YouGov BrandIndex collects data on thousands of brands every day. Tesla's scores are based on a 4-week moving average. Learn more about YouGov BrandIndex.