Elon Musk’s foray into conservative politics raised concerns that critics would stop buying cars from Tesla. However, TD Cowen has found a scenario where the growing political presence of CEOs can actually drive sales. Analyst Itai Michaeli said that two of the three models run by the company show sales following Musk’s political involvement, which includes running Musk’s political efficiency initiative. That’s because electric car makers could have enough customers in more Republican-leaning regions in the US to increase more than offset the losses seen in places that distort Democrats. “Recent concerns about the growing political disparity over Tesla’s brand are legal and add additional risk to (recent) demand,” Michaeli wrote to his client in a memo on Tuesday. “What seems to be overlooked, however, is that under a scenario where Tesla loses its share in Blue County but can earn money in the red, Tesla can actually net meaningful sales growth over time.” Musk’s involvement in the government is both worried by investors and analysts alike. The stock has fallen over the past eight weeks, marking Tesla’s longest weekly defeat. A favorite of retail investors, Megacap Tech shares have plummeted more than 44% since their launch in 2025. TSLA1Y Mountain Tesla, a year-old report from a destroyed Tesla dealer caught the attention of Trump last week, saying such actions would be considered domestic terrorism. Trump also said he would buy Tesla to show support for masks. The basic Michaeli scenario shows Tesla sales have increased over 100,000 over the long term. However, analysts said investors should be prepared to be more hurt in the short term given that “headwinds are likely to materialize before tailwinds.” “Our analysis suggests that over the years Tesla’s low penetration EV area growth can overcome the losses of its current locations,” says Michaeli, who has a stock purchase rating. His forecasts are based on the assumption that electric vehicle adoption will rise from around 4.9% today to 9.7% of conservative regional sales, with Tesla gaining around 55% of EV sales. There is also argument that mask politics will instead hamper Tesla. In a Morgan Stanley survey released last week, 85% of investors said that CEOs’ political activities have a “negative” or “extremely negative” effect on the basis of their business. Baird analyst Ben Caro told CNBC last week that reporting vandalism could result in a pause of potential Tesla customers. “When people’s cars are at risk of being locked or set on fire, they may be thinking about supporting Musk, supporting Musk, or Musk buying Tesla again,” Karo said. Still, the majority of Wall Street analysts have a buy rating like Michaeli for each LSEG. A typical price target suggests that the stock can recover by more than 48% next year. Tesla shares rose more than 2% on Wednesday.
