The relationship between a German Chancellor and the world's richest man isn't usually this messy. Honestly, it’s usually a dry affair of ribbon-cuttings and tax break negotiations. But the recent friction involving Olaf Scholz, Elon Musk, and the volatile landscape of German politics has turned into something closer to a digital street fight.
It started with a factory. It’s ending with a feud that might actually be changing where Germans buy their cars.
When the "Traffic Light" Met the Tesla King
A few years back, things looked almost cozy. When Tesla opened Giga Berlin in Grünheide, the German political establishment was basically doing backflips. They wanted those 12,000 jobs. Scholz, then the architect of the "Traffic Light" coalition, saw Tesla as proof that Germany could still do "big industrial things" despite its crushing bureaucracy.
Then the vibe shifted. Hard.
Musk didn't just build a factory; he started live-tweeting the demolition of German political norms. In late 2024, after Scholz’s coalition collapsed following the firing of Finance Minister Christian Lindner, Musk took to X (formerly Twitter) to call the Chancellor a "Narren" (fool). It was a single word, but it landed like a grenade in Berlin.
Most people think this is just two big egos clashing. It’s actually deeper. It’s a collision between the German Ordnungspolitik—the idea that the state and industry follow a strict, predictable set of rules—and Musk’s "move fast and break things" philosophy.
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The AfD Endorsement: A Bridge Too Far?
The real turning point wasn't the name-calling. It was the AfD.
In the lead-up to the February 2025 snap elections, Musk did something no major foreign industrialist has ever done in modern German history: he endorsed the Alternative für Deutschland (AfD). He called them the "last spark of hope" for the country. He even hosted a live discussion on X with Alice Weidel, the AfD’s candidate for chancellor.
Scholz’s response? "Don't feed the troll."
That was his official line to the magazine Stern. He tried to act like the adult in the room, reminding everyone that Germany is a "stable democracy" and doesn't take its marching orders from "the erratic comments of a billionaire." But behind the scenes, the damage was being done. For a Chancellor already struggling with a 15-point deficit against the conservative CDU leader Friedrich Merz, Musk’s intervention felt like a deliberate attempt to destabilize the "firewall" that mainstream parties have built against the far right.
The Backlash is Real (and it’s in the Data)
If you think political tweets don't sell cars, look at the German registration numbers for early 2025. They’re a bloodbath for Tesla.
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- Tesla registrations in Germany plummeted 76% in February 2025 compared to the year before.
- Meanwhile, the overall German EV market actually grew by 31% in the same period.
- Market researchers like Caliber noted that the number of Germans even considering a Tesla dropped from 31% to 16% in just a few months.
People are literally boycotting the brand because they don't like the CEO's politics. It’s a wild scenario. You have a factory in Brandenburg capable of pumping out 375,000 Model Ys a year, but the local population—the very people who are supposed to be buying them—is increasingly seeing the brand as "anti-democratic."
Why Friedrich Merz Doesn't Want Musk's Help Either
You’d think the opposition would love anyone who attacks Scholz. Not quite.
Friedrich Merz, who took over as Chancellor in May 2025, has been surprisingly cold to Musk. He called Musk's interventions "intrusive and presumptuous." See, the German center-right is still very much part of the "old guard." They want Tesla’s investment, but they don't want an American billionaire telling them how to run their social market economy.
Merz is walking a tightrope. He needs to fix the German economy, which has been stagnant for years. He needs the "Zeitenwende" (the historic shift in defense and energy) to work. To do that, he needs industrial giants like Tesla to stay and expand. But he can't be seen as a puppet of a tech mogul who flirts with the far right.
The Giga Berlin Problem: A Factory in Limbo
Right now, Giga Berlin is a weird place to work.
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The IG Metall union is locked in a brutal battle with Tesla management. The factory director, André Thierig, has been drawing "red lines" regarding the 35-hour workweek. There’s a rumor—one that’s picking up steam in German business circles—that Tesla might use the "difficult political climate" as an excuse to scale back.
If sales in Europe continue to crater, why keep the massive overhead of a German factory? It’s cheaper to build in Shanghai or Texas. Musk has already threatened to halt future investments if the union gains too much power. This isn't just a spat between Scholz and Musk; it's a fundamental question of whether the "German Way" of manufacturing can survive the "Musk Way."
What Most People Miss
The media loves the drama. They love the "Scholz vs. Musk" headline. But they miss the structural reality.
Germany’s automotive industry is its heartbeat. Companies like Volkswagen and BMW are finally getting their EV acts together. While Tesla’s image is taking a hit, VW registered over 16,000 new EVs in the first two months of 2025, while Tesla barely cleared 2,700. The "Tesla Killer" wasn't a specific car; it might have been the CEO's social media feed.
Honestly, it’s kinda fascinating. We are watching a real-time experiment in whether "brand values" matter more than "product quality" in a country that prides itself on engineering.
Moving Forward: Actionable Insights for the German Market
If you're watching this space, the noise is going to get louder before it gets quieter. Here is how the landscape is actually shifting:
- Diversify your EV news sources. The narrative on X is vastly different from the reporting in Handelsblatt or Die Welt. If you only follow one, you're missing half the story.
- Watch the incentives. Chancellor Merz is expected to push for new EV subsidies in 2026 targeted at middle-income households. This could revive the market, but it’ll be interesting to see if those subsidies are structured to favor local manufacturers over "foreign" ones like Tesla.
- Monitor the Works Council elections. The stability of Giga Berlin depends more on the upcoming labor votes than on any tweet. If Tesla loses the labor battle, expect a significant shift in where they allocate their global capital.
- Separate the man from the machine. For investors, it's crucial to distinguish between Tesla’s technical lead in EV architecture and its "political discount" in the European market. The former is still strong; the latter is getting more expensive every day.
The era of German politicians "courting" Silicon Valley with no strings attached is over. From here on out, it’s going to be a transactional, and likely very chilly, partnership.