Has dabbling in politics ever proved so costly? Between its peak last December and its dismal first-quarter sales and earnings report last week, Tesla lost roughly $800bn in market value. That knocked a cool $100bn or so off the wealth of its co-founder and CEO, Elon Musk. The shares have since bounced a little, in part as investors have cheered Musk’s promise to step back from wielding a chainsaw in US government departments as head of Donald Trump’s so-called Department of Government Efficiency, and spend more time running the electric vehicle maker. But repairing the damage to Tesla will require more than just a slightly less distracted boss.
Note that Musk didn’t promise to devote all his time to Tesla and business. He said he would still “spend a day or two” each week on “government matters”. Most boards and investors would still consider that a major distraction for a CEO, especially one overseeing about half a dozen companies at the same time. They might quietly accede if proximity to power delivered useful influence. Yet while the Trump administration did on Thursday move to loosen rules on self-driving vehicles, Musk has been unable to restrain Trump’s determination to roll back other pro-EV policies or his damaging tariff war.
Nor did the Maga convert commit to loosening the broader embrace of rightwing politics that, along with his Doge activities, has sparked consumer boycotts and protests at showrooms. Within hours of Tesla’s earnings call, Musk on his X network was reposting content by Britain’s jailed far-right activist Tommy Robinson and rising poll numbers for Germany’s AfD.