Elon Musk is focused on DOGE. What about Tesla?
Elon Musk’s role as President Trump’s cost-cutting czar and his immersion in right-wing politics appear to be diverting his attention from Tesla at a perilous moment for the electric car company.
Tesla’s car sales fell 1 percent last year even as the global market for electric vehicles grew 25 percent. Musk hasn’t addressed this underperformance and hasn’t offered any concrete plans to revive sales. Musk has spent months or years promoting vehicles before they appeared in showrooms. In the past, Mr. Musk spent months or years promoting vehicles before they appeared in showrooms.
And he has spent much of his time since the election in Washington and at Mr. Trump’s home in Florida — far from Austin, Texas, where Tesla has its corporate headquarters and a factory, or the San Francisco Bay Area, where it has a factory and engineering offices.
In the past decade or so, Tesla went from a struggling start-up to upending the global auto industry. Tesla sold millions of electric vehicles and made huge profits. Established automakers were forced to invest billions to catch up. Investors and analysts claim that Musk has lost interest in developing, manufacturing and selling cars. That could have serious ramifications for his company and the auto industry, which employs millions of people worldwide.
Even before he joined the Trump administration as the head of the Department of Government Efficiency, Mr. Musk’s running multiple companies had led investors and corporate governance experts to wonder whether he was spread too thin. Musk also runs SpaceX whose rockets transport astronauts and satellites to NASA and other organizations, X the social media website, and xAI which develops artificial intelligence. He wants to colonize Mars.
“We don’t even have a C.E.O. “We don’t have a C.E.O. Mr. Lander stated that he would like Mr. Musk remain on the Tesla board, but relinquish all of his duties as chief executive to someone else who could do it full-time. Lander stated that this was not a lot to ask. “That’s just the basic model of shareholder governance in America.”
Few, if any, executives have ever had such an array of responsibilities, said Eric Talley, a Columbia Law School professor who focuses on corporate governance. Talley added that the more loyal you are to different companies, the more difficult it will be to maintain a single loyalty. Musk and Tesla have not responded to requests for comment.
In previous years, Mr. Talley and the board of the company have defended Musk’s management and dismissed the notion that he is spread too thin. They have pointed to the company’s soaring stock price and robust profits as evidence that Tesla has not suffered because of his other commitments.
Mr. Musk’s support for right-wing leaders at home and in Germany, Britain, France and other countries appears to have alienated significant numbers of customers.
There are signs that Mr. Musk’s political activities and reduced presence at Tesla are also stirring dissatisfaction within the company.
The discontent was apparent during an unusual meeting last month at the company’s offices in Palo Alto, Calif., where numerous employees vented their frustrations.
A senior executive who spoke at the meeting told the employees that he, too, was discouraged by Mr. Musk’s “mercurial” behavior and by the departure of some senior executives who had been a moderating influence. The manager stated that the chief executive’s polarizing posts on social media and his work with the Trump administration are driving away customers and causing some employees to quit. This makes it difficult to recruit new talent for Tesla. The manager stated, “I ignore it and focus on what we are working on. Is it exciting for me? Does it have an impact?” The Washington Post first published the recording. Tesla’s stock price has dropped 25 percent since mid December, but it is still up 40 percent since the elections. The S&P 500 stock index is up about 6 percent since the election.
Many investors still have faith in Mr. Musk. That’s why Wall Street treats Tesla as being more than three times as valuable as Toyota, the world’s largest automaker.
Optimistic investors believe that the company will develop cars that can drive themselves in most conditions. Musk stated in January that he saw a path to Tesla becoming the world’s most valuable company. He added that the growth would be “overwhelmingly due to autonomous vehicles, and autonomous humanoid robotics.”
Mr. Musk seems to have little concern about Tesla’s largest business: selling cars. Musk replied that he did not understand the question, and claimed the company had already millions of cars in circulation. Tesla sales fell 12 percent last year in California, which accounts for nearly one-third of the electric cars sold in the United States. Tesla sales fell 12 percent last year in California, which accounts for nearly one-third of the electric cars sold in the United States.
“The hate is real,” Ross Gerber, chief executive of Gerber Kawasaki Wealth and Investment Management, wrote on an X post along with a photo of a Cybertruck that someone had defaced with an obscenity.
But political blowback is not the company’s only problem.
Tesla remains reliant on two vehicles, the Model 3 and Model Y, for 95 percent of its sales. BYD offers more than a dozen different electric vehicles, many of which are priced below $20,000. Auto experts believe Tesla desperately needs a lower-cost car to boost sales. Musk, however, delayed plans to build the low-cost vehicle in Monterrey in Mexico. The car would have cost $25,000, but he did not reveal any details. Analysts believe it will be based on Model 3 and be more expensive than $25,000
“You’d think they would double down and try to capitalize on their lead over other players,” Michael Lenox said, a business professor at the University of Virginia. “It begs the question,” he added, “has there been a lack of attention?”
Some investors said that Mr. Musk’s lack of interest in selling cars was apparent in how little he had said about Mr. Trump’s initiatives that could hurt Tesla’s sales.
The chief executive of Ford, Jim Farley, last week said that some of Mr. Trump’s plans to repeal Biden era incentives for electric cars could force the company to lay off workers. But Mr. Musk has said nothing publicly about them.
Environmentalists in particular are very concerned that Mr. Musk, who once talked about electric vehicles as a solution for climate change, has allied himself with climate change deniers.
“It’s really concerning that Elon is more focused on D.C. than on advancing E.V. “It’s really concerning that Elon is more focused on D.C. than on advancing E.V. Musk has said that electric cars do not need government incentives. Musk stated in January that you can’t stop electric cars. “It will happen.”
