Can Tesla’s reputation be saved? A crisis management expert weighs in

From Boeing to Bud Light, some of the world’s biggest brands have weathered intense public relations storms.

Now, electric vehicle pioneer Tesla (TSLA) finds itself in a similar predicament.

The company’s stock has been on a downward spiral since the start of the year, accompanied by declining sales in crucial markets such as Europe, China, and even the United States.

The Elon effect: politics and the Tesla brand

Compounding these challenges, CEO Elon Musk’s increasing embrace of right-wing politics has alienated some customers and cast a shadow over the Tesla brand.

Protests are growing at Tesla showrooms both in the US and abroad, and acts of vandalism targeting Tesla EVs are on the rise.

A new wave of Tesla protests is planned for March 29th.

To gain insight into this complex situation, Yahoo Finance spoke with crisis management expert Eric Dezenhall, founder of Dezenhall Resources and a veteran of numerous high-profile crisis responses.

Though he is discreet about naming his clients, Dezenhall has reportedly advised major corporations such as General Electric, Exxon Mobil, and Procter & Gamble.

He is also the author of “Wiseguys and the White House,” a book exploring the influence of organized crime on the presidency.

A house divided: can Tesla overcome the political divide?

Dezenhall observed that, “It’s almost impossible to be a politically divisive figure while running a consumer brand.”

He argued that Tesla is fundamentally different from a platform like X/Twitter, which can thrive on political discourse.

It’s a consumer product that was marketed as an alternative to fossil fuel-burning cars. This was appealing to progressives and even some conservatives. It’s lost its status as a progressive ‘badge’ product.

Dezenhall pointed to Bud Light as an example of a brand that suffered a similar fate.

“Beers tend to be badge products as they inspire loyalty for reasons other than the product itself,” he explained.

‘Come over for the Super Bowl. We’ll have Bud Light.’ It’s about feeling. The Dylan Mulvaney fiasco blew that up because it told loyalists, ‘We have no idea who you are, and we don’t care.’

He added, “Tesla really was and is a unique product, but now there are other EVs, so it’s not as special as it once was. Other brands have a shot at the eco-friendly badge.”

A path to recovery? Recapturing the core business

When asked what Tesla and Musk have to do to limit the damage, Dezenhall said, “A lot depends on two things: Does Musk stay in his DOGE position? If so, it will be hard to build Tesla back unless the product itself is so much more extraordinary than competitors — which it once was.”

He continued, “If he leaves DOGE and gets back to what made him, the public can forget the recent unpleasantness over time. If he stays with DOGE and keeps the slash-and-burn at this pace, it will be hard to balance both.”

When asked if new products would be enough for Tesla to overcome his political ambitions, Dezenhall responded, “People can overlook a lot if they love a product. Look how many years we ignored the perils of social media because they were addicted to their phones. In the face of overwhelming evidence, we’re just starting to ask tough questions about our phone addiction.”

Dezenhall concluded, “The aim of crisis management is to stop an attack, not improve an image. First, get back to business. Leave politics to somebody else. This isn’t your thing. But that advice doesn’t matter because he’s at the center of global discourse. That’s the main thing that has value in 2025.”

The boardroom dilemma: steering a charismatic CEO

Asked whether the board is asleep at the wheel here and what he would tell them given the circumstances with their CEO, Dezenhall said, “Boards at companies with charismatic founders are different from regular boards. They’re about supporting the king more than anything else. They’re not asleep: They know exactly what’s happening but are likely tiptoeing around the king or banging their heads against a wall. There is no earthly reason why Musk would listen to anyone. Gravity has never applied to him — and may never.”

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