Even with Elon Back, Analyst Warns Tesla's DOGE-Era Damage Is 'Irreversible'

Elon Musk's return to Tesla's helm was supposed to be a lifeline for the electric vehicle giant, but the company's troubles are far from over. After a bruising first quarter in 2025, with sales plummeting 13% and net income crashing 71%, Tesla is grappling with a crisis tied to Musk's polarizing political moves.

His high-profile role at the Department of Government Efficiency (DOGE) and outspoken support for far-right causes have sparked protests, vandalism, and boycotts, tarnishing Tesla's once-shining brand. As Musk pledges to refocus on Tesla, analysts warn the damage, especially from the DOGE era may be permanent.

Can Tesla steer out of this storm, or is the brand beyond repair?

Unpack Tesla's Devastating Q1 Fallout

Tesla's first-quarter results, announced on 22 April 2025, were a wake-up call. The company delivered just 336,681 vehicles, the lowest since 2022, down 13% from last year.

Revenue fell 9% to £15.5 billion ($20.6 billion), and auto revenue dropped 20%, missing Wall Street's £17.1 billion ($22.7 billion) forecast. While Musk blamed factory retooling for the Model Y refresh, the real culprit, analysts say, is brand damage.

Protests outside Tesla showrooms, from California to Berlin, and vandalism (swastikas scrawled on cars) have alienated buyers. Posts on X, citing 'irreversible' harm.

As per CNN, 'The damage [Musk] has done is 100% irreversible,' pointing to a permanent loss of liberal buyers who once flocked to Tesla's eco-friendly image. Even Wedbush Securities' Dan Ives, a Tesla bull, estimates a 10% permanent sales drop due to Musk's political profile, with 30% of Q1's decline tied to brand issues.

Confront Musk's Role in Brand Erosion

Musk's DOGE stint, advising President Trump on slashing federal spending, turned Tesla into a lightning rod. His support for Germany's far-right AfD party and controversial X posts, including reinstating Nazi sympathizers, fueled global backlash.

In Europe, Tesla's sales cratered 36% in March 2025, while overall EV sales rose 17%. Kelly O'Keefe of Brand Federation calls it 'brand homicide,' noting Tesla's shift from a climate-conscious symbol to a politically charged entity.

Musk dismissed the protests as 'paid' and blamed macroeconomic woes, but Tesla officials admitted vandalism and 'hostility' hurt sales in key markets. On X, users argue Musk 'ruined his own company's brand' in months.

Rebuild Trust in a Fractured Market

Musk's pledge to cut DOGE work to 'a day or two a week' from May 2025 sparked a 5% stock rally post-earnings, but analysts remain skeptical. Ives calls it a 'moment of truth' for Musk to navigate the 'brand tornado crisis'.

Tesla's plans for a £20,000 ($26,600) EV by June and a robotaxi service in Austin could help, but competition from BYD's cheaper models and Google's Waymo, already logging millions of driverless trips, looms large.

JPMorgan's Ryan Brinkman slashed Tesla's 2025 earnings forecast to £1.84 ($2.45) per share, citing 'unprecedented brand damage'. Rebuilding trust won't be easy. Tesla's liberal-leaning customer base, once 40% Democrat, has dropped to 29%, per Strategic Vision.

While some Trump supporters may buy Teslas, it's not enough to offset losses, O'Keefe says. With tariffs adding 5–10% to vehicle costs, Tesla faces a narrow path to recovery. If Musk can't separate his persona from the brand, Tesla risks becoming a cautionary tale of self-inflicted wounds.