Tesla CEO Elon Musk's growing profile as an international political figure is causing controversy for the automaker and could hurt sales, according to a Wall Street analyst. Baird analyst Ben Kallo said Monday on CNBC's " Squawk on the Street " that recent reports of vandalism against Tesla dealerships and vehicles could dampen demand. "When people's cars are in jeopardy of being keyed or set on fire out there, even people who support Musk or are indifferent Musk might think twice about buying a Tesla," Kallo said. There have been reports of vandalism across the country, including repeated fires set at a Tesla dealership in Colorado, according to NBC News . Musk's association with President Donald Trump and his rise as a right-wing political figure is a change from Tesla's early days, when the company's dominance of the electric vehicle market made its brand more closely aligned with the environmental left. Now Musk is an advisor to Trump and is leading the so-called Department of Government Efficiency, which has looked for ways to eliminate government jobs, cut spending and downsize regulatory agencies. While it isn't clear if the shift has truly driven away Tesla's existing U.S. customers, or attracted new ones who agree with Musk's politics, the company has seen sharp drops in vehicle registrations in some European markets where the CEO has also become a political lightning rod. Tesla's sales in Europe in January plunged 45% . Kallo still has an outperform rating on Tesla's stock overall, but he did put out a negative tactical call note on the stock last week. On Monday, the analyst said profit estimates for Tesla's first quarter are "too high" because of the company's switch to production of an updated Model Y and, potentially, the political controversy as well. "It's too early to know, but I do think that with the production ramp impacting deliveries, that's the bigger thing that will continue that narrative of demand at risk. And so I think that we have a couple months before we determine if he's attracting more buyers or losing more buyers," Kallo said. "It's very plausible that demand is being destructed, I would say in Europe even more plausible, but the bigger thing right now is numbers are too high because of production and need to come down," he added. Shares of Tesla were down 9% on Monday and are now lower by 40% year to date . The stock has lost all of its postelection gains. TSLA 6M mountain Tesla's stock has fallen sharply in 2025 and has now erased all its postelection gains. Kallo is not the only Wall Street analyst who is skeptical of Tesla. UBS and Redburn Atlantic both reiterated their sell ratings on the stock on Monday.
