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Political Identity and Consumer Behaviour: Musk and Tesla in Germany

Author

Listed:
  • Buggle, Johannes

    (University of Innsbruck)

  • Butschek, Sebastian

    (University of Innsbruck)

  • Tenschert, Elian

    (University of Innsbruck)

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.

Suggested Citation

  • Buggle, Johannes & Butschek, Sebastian & Tenschert, Elian, 2026. "Political Identity and Consumer Behaviour: Musk and Tesla in Germany," IZA Discussion Papers 18458, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp18458
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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