Protests against Elon Musk and Tesla have been spreading around the world thanks to the CEO’s involvement in the Trump administration. Now those protests are listed in an official “risk factor” in paperwork Tesla is required to file with federal regulators.
The new language, filed with the Securities and Exchange Commission on Wednesday morning, shows the backlash against Musk has risen to such a level that Tesla’s lawyers feel the need to warn investors it could damage the company’s brand and business.
While risk factors are typically written to be broad and overly cautious, sometimes the inclusion of new (or removal of old) language can signal what issues or developments are most important to a company like Tesla and, crucially, its legal team.
For years, Tesla has included a risk factor informing investors that “Tesla’s products, business, results of operations, and statements and actions of Tesla and its management are subject to significant amounts of commentary by a range of third parties.”
This risk factor warned this “criticism, which may be exaggerated or unfounded, such as speculation regarding the sufficiency or stability of our management team” could “harm our business and make it more difficult to raise additional funds if needed,” according to language in the company’s most recent annual report filed in January.
That language was changed Wednesday.
Tesla updated the risk factor language to now include the criticism “has incited protests, some escalating to violence targeting our operations, products and personnel.” Tesla’s lawyers also expanded what’s at risk, saying negative perceptions resulting from the protests, along with the broader criticism of the company, “may harm our brand and our business (including sales) and make it more difficult to raise additional funds if needed.”
Despite Tesla’s implication in the new language, there is no known link between the global protests against the company and the isolated acts of vandalism against its showrooms and Supercharger stations. (Musk went even further Tuesday, claiming on Tesla’s quarterly earnings call that the protesters are “paid” without offering any kind of evidence.)
It was already apparent Musk’s actions were potentially harming Tesla. What’s been hard to parse is how much damage the protests are doing.
The financial results Tesla released Tuesday showed such a stark drop in automotive revenue and profit year-over-year that it was clearly making some dent. Musk and other Tesla executives on the call also admitted that the protests were creating a “negative impact.”
But Wednesday’s SEC filing, in some ways, offers a more clear answer: The protests are significant enough that Tesla’s lawyers had to acknowledge them in writing.
A spokesperson for Tesla Takedown, which has helped organize protests in cities throughout the world, celebrated the inclusion in the company’s risk factors.
“We couldn’t ask for a better endorsement of our movement than Tesla officially naming us as a risk factor. When the truth becomes a threat, you know you’re making an impact,” they said in an emailed statement to TechCrunch. “The tremendous success of Tesla Takedown has created a powerful platform for broader impact.”
