The trials and tribulations of Tesla: When a personal brand becomes a business liability

Emma Waterman, strategy director at FutureBrand Australia, dissects Tesla’s brand turbulence in the wake of Elon Musk’s increasingly controversial public profile.

'I bought this before we knew Elon was crazy.' 

This isn't just a sticker (now plastered on a growing number of Tesla bumpers) - it's a sign of the sticky situation the company now finds itself in. Tesla's Q1 delivery of 336,681 vehicles – the lowest since mid-2022 – reveals more than a momentary slump. The electric vehicle pioneer's results tell a fascinating, if sobering, tale of what happens when a company fails to invest in its own brand. 

By neglecting to do so, Tesla has essentially become 'Elon's car company' – and is now struggling with the consequences as Musk's increasingly wayward public persona evolves in ways that risk alienating long-time Tesla loyalists. 

While the world watches on to see what Musk might do next, here's a look at three crucial lessons we can all take away from the Tesla turbulence. 

1. Your brand is your business

Don't tell me brand doesn't impact business. Still sceptical? Just look at Tesla's recent financial freefall. Without its own distinct brand, the company appears to have been absorbed by Musk's personal brand, the two now inseparable and indistinguishable. As Musk stepped further into Trump's political arena, his EV showrooms became targets of protest and vandalism by consumers who seemingly felt betrayed. 

The market's reaction was swift, with a 13% drop in Q1 vehicle sales and a 36% plunge in share price. The quarterly figures speak volumes. Brand perception directly impacts financial performance – for better or worse. By allowing Musk’s brand to fill the Tesla brand void, the company is now watching its bottom line fluctuate with every new political pivot and Twitter (X) tirade. 

2. Beware the say-do gap 

Once the darling of progressives, Tesla built its reputation on environmental responsibility and innovation. Consumers who purchased their EVs weren't just buying cars, they were buying a reflection of their values. As Musk's brand gradually consumed Tesla's, the company became vulnerable to his increasingly controversial public stance. When the man who built an empire on sustainable energy began advising a president with policies widely perceived as hostile to that very cause, the contradiction became impossible to ignore. 

Consumer confusion quickly evolved into outrage. This is a classic case of the say-do gap: a brand failing to deliver what it promises. But through its entanglement with Musk's actions, Tesla isn't merely missing expectations, it's actively contradicting them. The consequences go beyond bad PR – they risk eroding trust, leading to consumers quietly disengaging or actively boycotting the brand altogether. 

3. The price of not investing in brand 

Tesla's current predicament stems partly from its own strategic choices. Musk famously declared, "Tesla does not advertise or pay for endorsements. Instead, we use that money to make the product great". 

This disdain toward traditional brand building might have served Tesla well. Until it didn't. Without substantial investment in long-term brand building, Tesla now seems to find itself exposed. Because product innovation alone can only carry a company so far, especially when competitors begin to close the gap. 

Had Tesla created greater separation between Tesla-the-company and Musk-the-man, their woes wouldn't necessarily have disappeared. But the Musk effect would've been diluted, giving Tesla not only greater flexibility to champion its founder’s visionary strengths but also greater resilience to resist the impact of his evolving personal brand. 

The road ahead 

Now the existential question presents: Can Tesla survive as ‘Tesla' or is it destined to remain 'Elon's car company'? What Tesla is experiencing isn't simply bad publicity – it's a fundamental re-evaluation of what the brand means to consumers. 

In the automotive world, where purchases are both significant investments and personal statements, meaning matters. A lot. Your brand is what your brand does. And what it does has real business implications. 

For business leaders watching from the sidelines, Tesla's turbulence offers a clear lesson: invest in defining your brand, or risk someone else defining it for you. And remember, tie your brand too tightly to any one individual and you inherit not just their strengths but their weaknesses too. 

I wouldn’t bet against Musk. But I’d bet on your brand first.