By Tasha Baxter, Account Manager

Tesla's recent sales slump undoubtedly highlights a modern business dilemma: what happens when a company's leader, and its face, becomes its biggest liability?

Remember when owning a Tesla was the ultimate status symbol for the environmentally conscious elite? How times have changed. In April, Tesla sales plummeted to their lowest level in three years, with many pointing to Elon Musk's controversial public persona as the key factor. In the latest instalment of Tesla’s share price saga, Musk has now pledged to step back from his role in Trump’s administration.

While it’s true that the EV market has become more competitive, Musk's controversial role in the US government and his divisive opinions have certainly had an impact on sales, sparking boycotts and protests worldwide. For many potential Tesla customers, the decision to purchase is now less about reducing emissions and more about being perceived as being a Musk supporter.

But this issue isn’t just confined to the SpaceX supremo. Executives have become more visible than ever, not just in the financial pages, but more widely thanks to social media. Having a charismatic, high-profile leader can be great for a brand, creating the kind of publicity that marketing budgets can only dream of. The days when executives could hide away from the public eye and just focus on the inner workings of their companies are gone. Now, they’re expected to engage with a growing list of stakeholders.

Some leaders, like Musk, have embraced this visibility. Others have had it thrust upon them unwillingly, like the once-elusive CEO of Shein whose own employees reportedly couldn't even recognise, but who has had to step into the limelight as the company pursues public listings.

When it works, this personal brand alignment is great. Customers form strong loyalty not just to products but to the vision and values the leader embodies. Steve Jobs springs to mind as one example, an evangelist and visionary who customers arguably bought into just as much as they bought into the Apple brand. But when it goes wrong - well, just ask Tesla shareholders.

We all remember the old cliché that reputations take years to build but seconds to destroy. For companies with ‘celebrity’ leaders, this vulnerability is amplified. The bigger the executive's profile, the more scrutiny they face and the harder both they and their company can fall when things go wrong.

A cautionary tale that comes to mind is that of Elizabeth Holmes of Theranos. Her fraud conviction didn't just destroy her personal reputation but it erased billions in investors’ capital. Similarly, Musk’s controversial political involvement, opinions and activities have dampened enthusiasm for Tesla products.

Musk's challenge is that he's not just Tesla's founder - he is Tesla in many people's minds. The company has become so intertwined with his personal brand that creating distance between the two seems nearly impossible. Particularly now he plans to step back from his political activities and spend more time at the car-maker.

For businesses with high-profile leaders, the key is balance. Companies need a charismatic and engaging leader, but not one that dwarfs the company itself, or conducts themselves controversially. Since CEOs are often a company's most visible face, every public appearance, social post or political stance can impact brand perception.

For Tesla, the ship may have already sailed - but for other businesses, the Tesla-Musk saga offers a valuable lesson in reputation management.