Political Identity and Consumer Behaviour: Musk and Tesla in Germany

Johannes Buggle (), Sebastian Butschek and Elian Tenschert
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Johannes Buggle: University of Innsbruck
Sebastian Butschek: University of Innsbruck

No 18458, IZA Discussion Papers from IZA Network @ LISER

Abstract: We study how a political identity shock affects high-stakes consumption choices. Late in 2024, Elon Musk endorsed Germany’s far-right Alternative für Deutschland. We document that after this, Tesla sales rose by up to 30 percent in right-leaning districts relative to left-leaning ones, without measurable substitution to other electric vehicles. Divestment in second-hand markets shows no partisan differences, consistent with resale requiring a larger identity cost from Tesla's image shock than non-purchase. Our lower bound-estimate for the overall loss in Tesla sales is 6500 vehicles in the first half of 2025, worth at least €241 million.

Keywords: consumer identity; political polarization; Elon Musk (search for similar items in EconPapers)
JEL-codes: D12 P16 Z13 (search for similar items in EconPapers)
Date: 2026-03
New Economics Papers: this item is included in nep-pol and nep-tre
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