“We’re not on the ragged edge of death, not even close,” Tesla CEO Elon Musk told investors on Tuesday’s earnings call. Those are not the words of a leader whose business is doing well, and the first-quarter numbers were indeed bad: In the first quarter of the year, Tesla’s profits fell 71% from the same period a year ago, driven by a sharp drop in sales.
Perhaps in reaction to those numbers — and Tesla’s stock declining more than a third in the same period — Musk told investors that he’ll soon step back from his role overseeing the Department of Government Efficiency (DOGE). But whether you’re a Tesla shareholder or just someone who relies on the federal government — which includes all of us — there’s little reason to be reassured.
The innovation for which the company had been known has ground to a halt.
Since Musk took control of Tesla, it has grown from a tiny firm with just one model to a company that sold almost 1.8 million vehicles last year alone. Tesla built its brand on its CEO’s persona; buying one of its vehicles meant acquiring a bit of Musk’s image as an innovative genius creating the future in which we’ll all live.
But today, Musk is an anchor dragging the company down. His carefully cultivated image as an brilliant innovator has been superseded by reality, where he takes a chainsaw to vital government services, spends into nasty beefs (and silencing his critics) on his increasingly toxic social media platform and throws up straight-arm salutes.
According to a recent CNBC poll, half of the public has a negative view of Musk, compared to only 36% of Americans (mostly Republicans) who view him positively. The disapproval extends to Tesla: 47% of the respondents view the company negatively, while only 27% view it positively. Most dangerous for its future sales, the people most interested in buying an electric vehicle — liberals — are also the ones who recoil from Tesla. While Musk might have plenty of right-wing fanboys, they’re far less likely to buy an EV, even from him. Apparently, the event President Donald Trump staged in March on the White House lawn to promote Tesla didn’t do the trick.
Speaking of the president, though Tesla sources more of its parts domestically than other U.S. carmakers, Trump’s tariffs will still raise its costs. Meanwhile, Chinese electric car companies are leapfrogging Tesla (and every other American carmaker) in affordability and technological development.
And the innovation for which the company had been known has ground to a halt. Musk’s promises of great new things to come — from cybercabs to “Full Self-Driving” technology — keep getting delayed, and the only new model it has debuted in years is a disaster. The Cybertruck is essentially Musk in vehicular form: undoubtedly attention-grabbing, but beset by atrocious design flaws, weak sales and contempt from much of the public. It’s gotten so bad the company won’t even accept Cybertrucks for trade-in.
Thanks to Musk and his so-called Department of Government Efficiency, one agency after another has effectively been wiped out of existence.
It’s impossible to know whether Musk will revive Tesla’s fortunes if he spends more time there; given how he runs his companies these days, including X and Tesla itself, many of his employees would probably rather not have him around. The tens of thousands of government employees who have lost their jobs because of Musk’s campaign of destruction can surely relate. It may not be surprising that Musk is stepping away from his role as a “special government employee” — by law, SGEs can only serve 130 days in a calendar year — but the damage has been done.
Already, thanks to Musk and his so-called Department of Government Efficiency, one agency after another has effectively been wiped out of existence. In many cases, such as the U.S. Agency for International Development and the Consumer Financial Protection Bureau, it seemed that Musk had some personal animus against the agencies (though others in the administration shared that animus). In many others, DOGE staffers have embedded itself within the leadership, engineering mass firings, canceling vital contracts and poking around ham-handedly in vital databases. Their work will continue even if Musk steps back, as Trump’s order creating DOGE set an end date of mid-2026.
Just as important, the new administration is infused with the spirit of Musk-ism: a belief that rules are for the weak, destroying established structures is always desirable, and the lives of ordinary people are meaningless. That spirit too will endure.
On Tuesday’s earnings call, Musk tried to explain away the wave of demonstrations at Tesla dealerships, as Americans in every corner of the country have come out to protest him and the chaos he has wrought. “The protests — they’re very organized, they’re paid for, they’re obviously not going to admit that the reason they’re protesting is that they receive fraudulent money and are the recipients of wasteful largesse,” he said. This charge — that no liberal political action can ever be a sincere expression of the participants’ beliefs, but must instead be fabricated by some nefarious conspiracy — is one Republicans often make.
But more than most Republicans, Musk may genuinely believe it. When you’re the richest person on earth, surrounded by sycophants, the idea that most of the country loathes you simply does not compute. He may ask himself, Don’t all those commoners realize who I am? The answer is that yes, we know exactly who you are. We may have not realized it before, but now we all understand.
