Elon Musk ‘s foray into conservative politics has raised concern that critics will stop buying cars from Tesla . But TD Cowen found scenarios in which the CEO’s growing political presence can actually boost sales. Analyst Itay Michaeli said two out of three models run by the firm show sales increasing following Musk’s political involvement, which has included running President Donald Trump ‘s contentious government efficiency initiative. That’s because the electric vehicle maker may pick up enough customers in more Republican-leaning areas of the U.S. to more than offset the losses seen in places that skew Democratic. “Recent concerns over a growing political divide around Tesla’s brand are legitimate, adding further risk to [near-term] demand,” Michaeli wrote to clients in a Tuesday note. “But what such concerns seemingly overlook is that under scenarios whereby Tesla were to lose share in Blue counties but gain in Red, Tesla could actually net meaningful sales gains over time.” Musk’s involvement in government has worried investors and analysts alike. Shares have tumbled for the last eight weeks, notching Tesla’s longest weekly losing streak on record. The megacap tech stock, which is a retail investor favorite, has now plunged more than 44% since the start of 2025. TSLA 1Y mountain Tesla, 1-year Reports of vandalized Tesla dealerships have caught the attention of Trump, who said last week that such acts will be considered domestic terrorism. Trump also said he would buy a Tesla to show support for Musk. Michaeli’s base scenario shows Tesla sales rising by more than 100,000 over the long term. But the analyst said investors should be ready for more hurt in the near-term, given that “headwinds would likely materialize before tailwinds.” “Our analysis suggests that over a multi-year period, Tesla’s growth in under-penetrated EV regions could overcome losses in current strongholds,” said Michaeli, who has a buy rating on the stock. His prediction is based on an assumption that electric vehicle adoption rises to 9.7% of sales in conservative areas from about 4.9% currently, and assumes Tesla wins about 55% of the EV sales. To be sure, there’s arguments that Musk’s politics will instead hamper Tesla. In a Morgan Stanley survey released last week, 85% of investors said the CEO’s political activities has either a “negative” or “extremely negative” impact on business fundamentals. What’s more, Baird analyst Ben Kallo told CNBC last week that the vandalism reports could give potential Tesla customers pause. “When people’s cars are in jeopardy of being keyed or set on fire out there, even people who support Musk or are indifferent [to] Musk might think twice about buying a Tesla,” Kallo said. Still, the majority of analysts on Wall Street have a buy rating like Michaeli, per LSEG. The typical price target suggests shares can rebound by more than 48% over the next year. Tesla shares rose more than 2% on Wednesday.
