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IZA Discussion Paper No. 18458
March 2026
Political Identity and Consumer Behaviour: Musk and Tesla in Germany
Johannes Buggle, Sebastian Butschek, Elian Tenschert

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.

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Mark Fallak
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Olga Nottmeyer
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+352 585-855-501
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Christina Gathmann
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The IZA@LISER Network is a global community of scholars dedicated to excellence in labor economics and related fields, now coordinated at the Luxembourg Institute of Socio-Economic Research (LISER) following its transition from Bonn.

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