It’s been a rough start to 2025 for megacap technology stocks. As of market close on April 24, each member of the “Magnificent Seven” has generated a negative return so far this year.
Among this list of artificial intelligence (AI) darlings, none has fared worse than electric vehicle (EV) manufacturer Tesla (NASDAQ: TSLA). As I write this, shares of Tesla have dropped by an abysmal 36% on the year.
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One of the biggest factors driving the sell-off in Tesla stock is perceived damage to the company’s brand. Let’s explore why investors have been concerned about the brand of late, and more importantly assess why these fears may be overblown.
Brand equity is one of the most valuable assets a company can have. There are very few businesses in the world that can command immediate recognition of their products. Apple, Coca-Cola, McDonald’s, and Nike are in rare company when it comes to building a brand moat.
I’m not sure I would place Tesla at the top of most-recognized brands in the automobile industry. However, in the EV subsector of the broader industry, I think it takes the throne (or close to it).
For most companies, achieving a level of global scale and brand recognition would require billions of dollars for sales and marketing. While Tesla does invest in advertising to some degree, the company has one thing no other automobile business can claim: an outspoken CEO named Elon Musk.
As I wrote a year ago, Musk more or less serves as his company’s primary marketing tool. Thanks to social media, he has an enormous reach around the world and can market the latest and greatest at his company with the touch of a button. The thing is, his influence can be both an asset and a liability. Let’s explore what I mean by that.
During the final phases of the 2024 presidential election, he emerged as a significant financial supporter of GOP nominee Donald Trump. Following his victory on Nov. 5, 2024, Trump ended up appointing Musk to lead a new program called the Department of Government Efficiency (DOGE).
The primary goal of DOGE is to identify areas of wasteful spending in the federal budget in an effort to reduce the U.S. deficit. At a high level, a lot of people may not see such a problem with that goal.
However, as is often the case with Musk, he has made DOGE into a major publicity campaign. Nearly every day, it posts on social media what contracts it has canceled, why it canceled them, and how much money those deals were worth.
DJ Kamal Mustafa
I’m DJ Kamal Mustafa, the founder and Editor-in-Chief of EMEA Tribune, a digital news platform that focuses on critical stories from Europe, the Middle East, Africa, and Pakistan. With a deep passion for investigative journalism, I’ve built a reputation for delivering exclusive, thought-provoking reports that highlight the region’s most pressing issues.
I’ve been a journalist for over 10 years, and I’m currently associated with EMEA Tribune, ARY News, Daily Times, Samaa TV, Minute Mirror, and many other media outlets. Throughout my career, I’ve remained committed to uncovering the truth and providing valuable insights that inform and engage the public.
