Elon Musk's purchase of Twitter could indirectly affect Tesla.
Why it matters: Tesla's on a hot streak, posting several quarters of record sales and profit despite the supply chain crunch.
- But buying Twitter could influence consumer views of the world's top EV seller.
- It means more competition for attention from Musk — whose hands-on approach has even meant sleeping on a Tesla factory floor — alongside his role as CEO of SpaceX and other pursuits.
- It also thrusts him — and by extension Tesla — further into the political spotlight thanks to lawmakers' scrutiny of Big Tech and social media.
What they're saying: "We believe the biggest concern will be losing of Musk's attention around Tesla. Balancing Twitter, Tesla, and SpaceX is a tight wire act for Musk," Wedbush Securities analyst Dan Ives tells me.
- Ives, via email, said this dynamic and Musk's pledge of Tesla shares to help finance the deal creates an "overhang" on Wall Street's perception of Tesla stock.
The intrigue: Musk occupies an unusual niche at the intersection of climate, tech and cultural politics.
- He's a pioneer in electric cars, yet has drawn fans on the right for opposing COVID restrictions and his goal of less content moderation on Twitter.
Threat level: Alison Taylor, a New York University business ethics expert, sees "Tesla and regulatory risk as Musk's vulnerable flank," citing risks from several political directions.
- She said via email that Republicans are happy about Musk's Twitter move because they hope he'll let Donald Trump back onto the platform.
- If Trump isn't brought back, "there is a possibility that Tesla could be targeted by lawmakers for any number of issues," she tells me via email.
- She also notes Tesla has faced allegations of racial discrimination and union-busting, while its showroom in China's Xinjiang region, where the Chinese government has been accused of carrying out genocide against Uyghur Muslims, has also drawn criticism.
- "China and human rights is the only issue I can think of where AOC [Alexandria Ocasio-Cortez] and Ted Cruz actually agree with each other," Taylor notes.
What's next: iSeeCars.com executive analyst Karl Brauer notes some Tesla fans could be put off by Musk's approach to content, yet there are "longtime anti-Tesla folks convinced he’s going to save democracy."
- "It’s entirely possible he’ll lose sales as a result of purchasing Twitter, but it’s also possible demand will grow from an entirely new set of consumers that never previously considered one," he said via email.
