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Has dabbled in politics proved to be so expensive? From its peak in December last year, Tesla lost roughly $800 million in market value between its disastrous first quarter sales and revenue report last week. It knocked something cool about $100 billion from the wealth of co-founder and CEO Elon Musk. Stocks then bounced a bit as investors cheered Musk’s promise to step back from wielding chainsaws in the U.S. government department as Donald Trump’s so-called government efficiency officer, and Musk’s promise to spend more time running the electric car maker. However, to repair damage to Tesla, you need more than just a distracting boss.
Note that Musk did not promise to spend all his time on Tesla and business. He said that he “we will spend a day or two” each week on “government issues.” Most boards and investors consider it a major distraction for CEOs, especially CEOs who simultaneously oversee around half a dozen companies. If proximity to power has a useful influence, they may join quietly. However, while the Trump administration moved on Thursday to loosen rules for self-driving cars, Musk was unable to curb Trump’s resolve to roll back other pro-EV policies or tariff wars that would damage him.
Also, MAGA, along with his Doge activities, did not commit to loosening the wider embrace of right-wing politics that sparked boycotts and protests in the showrooms. Within hours of Tesla’s revenue calls, his X-Network mask had reposted content by British imprisoned far-right activist Tommy Robinson and an increase in votes for Germany’s AFD.
However, the reality is that Tesla was suffering even before masks became Magazine. Global car sales in 2024 have declined slightly since 2023. That increased profit came from selling regulatory carbon credits to other car manufacturers rather than selling cars. Its aging product lineup was no longer an exciting buyer. Tesla was too late to introduce a cheaper model. Additionally, Chinese rivals such as BYD can now gain the advantage of innovation. Chinese consumers shrugged the launch of Tesla’s “fully autonomous” system in February. Local rivals already offer similar magic at a cheaper price.
Some investors suspect that Restless Musk is already getting bored of running a car company. Last week, Tesla claimed it is going well alongside plans to start production of more affordable models by June and to launch a Driverless Robotaxis service in Austin. Musk announced on the course that Tesla is the most valuable company in history, producing a fleet of “Cybercabs” and Optimus Humanoid Robots. But even the most recent half of Tesla’s value only left almost stock where they were when Trump was re-elected. Apply something similar to a “regular” car company. It is clear that a huge amount of value is still betting on Musk’s vision.
Teslachief’s record suggests that if anyone can make this vision come true it is him. But doing so would certainly require his undivided attention. You’ll stroll around the White House and Mal Arago, film X-ing all the time, and never live streaming with right-wing politicians. If Musk is not ready to retreat from those activities, he will need to appoint a CEO who has not been taken away from Tesla. Tesla will also benefit from becoming a more ordinary company from a governance perspective. The Delaware Premier Court, which ruled last year on Musk’s vast compensation package, highlighted its close ties with CEOs of many board members.
The masks already guarantee their location in the Pantheon, a global business pioneer. But he will be giving his investors, clients and undoubtedly everyone else a favor.
