Tesla's Brand Turmoil: The Musk Effect

Tesla investors are relieved after CEO Elon Musk promises to refocus on the company amid concerns his political affiliations damage the brand. Despite a rise in shares, Tesla faces a brand recovery challenge as political controversies loom over its image, threatening sales and market valuation.

Tesla investors experienced a sense of relief following CEO Elon Musk's announcement to redirect his focus on the electric car manufacturer. However, this promise hasn't fully alleviated concerns that his political leanings may have caused lasting harm to the company's brand.

The automaker's stock price saw an 8% uptick after Musk revealed his intention to reduce advisory duties for U.S. President Donald Trump, even as Tesla reported a significant 71% drop in net income. Musk's political affiliations have attracted opposition and protests, contributing to Tesla's brand challenges.

Analysts caution that the brand's recovery will be arduous in light of ongoing political controversies. Tesla's aspirations include launching an affordable model by early 2025, but brand perception and affordability remain critical hurdles to growth.

(With inputs from agencies.)