Musk Takes Chainsaw To His Own Empire
They say "No publicity is bad publicity" - Musk has proven them wrong!
Elon Musk’s foray into politics appears to be a high-stakes gamble with mixed motives - ranging from ideological alignment to strategic business interests. However, the fallout is clear: declining sales, lost contracts, reputational damage across multiple markets and a huge hit to his personal wealth.
Tesla stock surged following Trump’s election in November hitting $479 a share, but yesterday it was at $261 in after-hours trading. Elon Musk’s wealth has plunged $121 billion since December on Tesla alone, without taking into account his losses on X (formerly Twitter), SpaceX and other ventures - more on this shortly.
Once hailed as a visionary innovator, Musk now risks undermining the empire he built.
Musk has increasingly used X (formerly Twitter) to amplify his political views, aligning with right-wing figures and even taking an advisory role in the Trump administration. His political endorsements and controversial statements have alienated customers, governments, and investors worldwide, triggering serious consequences for his businesses.
Elon Musk is said to have Asperger’s syndrome which is a form of autism. Perhaps this explains his difficulty in assessing other people’s feelings, lack of social awareness, his exaggerated gestures and his aggressive behaviour. However, the American public is in no mood for excuses when hard working people are losing their jobs at the hands of an egotistical billionaire.
Tesla: A Brand in Decline
Musk’s endorsement of Germany’s far-right Alternative for Germany (AfD) party further alienated many consumers. This backlash extends beyond Germany, with sharp sales declines in France, Italy, and Spain. The growing perception is clear: many Tesla owners are increasingly embarrassed to be associated with Musk. If current customers are distancing themselves, what does that mean for Tesla’s future?
Tesla’s reputation as a leader in sustainability has taken a hit. Musk’s actions and affiliations have caused significant sales drops in key markets:
Sales in Germany plummeted by 75% in February 2025, despite a surge in EV sales across the country.1
Tesla's European sales for January 2025 declined 50.4% compared to the previous year.
In January 2025, Tesla sales declined sharply in several European countries: 59.5% in Germany, 63.4% in France, 12% in the UK, and 42.5% in the Netherlands.
Across the EU Tesla registrations dropped 45% between January 2024 and January 2025.2.
Beyond Europe and North America, Tesla faces growing competition from Chinese EV manufacturers. In February 2025, Tesla's sales in Australia plummeted by 71.9% compared to a year earlier and Musk’s political entanglements may exacerbate these challenges as governments and consumers increasingly distance themselves from his companies.
People are not only voting with their wallets, they are taking to the streets to let their feelings be known.
Tesla infrastructure, including the network of charging stations upon which the brand has built its success, is being vandalized in protest3.
Some famous Tesla owners are distancing themselves from Musk, including singer Sheryl Crow. Last month she posted a social media video showing her waving goodbye to her electric vehicle as it was hauled away from her home:
In fact, there is growing evidence that people are ashamed to be associated with Elon Musk. The following Tesla car was seen in Montreal, Canada4:
Similar Tesla driving apologists are appearing the world over:
If current Tesla owners are patently embarrassed to be associated with Elon Musk, what does that tell us about future demand for his products and services?
Tesla’s stock fell 28% in February 2025, its worst month since 2022, coinciding with Musk’s first full month in the White House5.
SpaceX and Geopolitical Fallout
Musk’s decisions regarding Starlink have also raised concerns. Reports suggest that he declined to activate Starlink over Taiwan at the request of Vladimir Putin, allegedly to appease China. Musk's outspoken nature on social media, particularly his bias towards China in the dispute over the sovereignty of Taiwan, naturally offended Taiwan’s government.
Recently, Taiwan6, in an effort to enhance its mobile and internet infrastructure to reduce vulnerabilities to a potential Chinese, has sought satellite-based communication solutions. One might assume Starlink, SpaceX’s satellite internet division would provide the perfect solution, but Taiwan explicitly ruled out Starlink as an option as the result of Musk. Taiwan is now in discussions with Amazon’s satellite subsidiary, Project Kuiper instead.
Similarly, Ontario in Canada recently cancelled its $100 million CAD Starlink contract7, citing dissatisfaction with Musk's political behavior.
The European Union is in discussions with four European satellite internet providers to explore alternatives to Starlink for Ukraine’s defense forces, the Financial Times reports. Negotiations are underway with Luxembourg-based SES, Spain’s Hisdesat, British company Viasat, and the French-British operator Eutelsat/OneWeb.
There is a clear trend emerging here.
The opportunity cost to SpaceX of Musk’s recent actions is huge and investors ought to be concerned.
Decline of X (formerly Twitter)
X (formerly Twitter) has experienced a significant decline in its commercial fortunes since Elon Musk acquired the company in October 2022 for $44 billion.
Musk’s management of X has alienated users and advertisers. Notable companies such as Disney, NBCUniversal, CVS Health, and Unilever paused their advertising on the platform8, while others have permanently abandoned the platform. Advertising historically accounted for 90% of revenues for Twitter, so losing big names hurts the business.
It isn’t only the advertisers who are deserting X. Musk’s removal of moderation policies and promotion of divisive right wing and arguably fascist political figures has driven users toward alternative platforms like Bluesky.
The platform's user base and advertising revenue continue to shrink, reflecting how Musk’s personal views are impacting the company’s viability. Fidelity, an investment firm, estimates that X's value has declined by nearly 80% since Musk's acquisition9.
Does Anyone Really Know What Musk Believes?
Musk built his image as a sustainability champion, yet his actions contradict this narrative. For instance, Musk’s promotion of electric vehicles and renewable energy contrasts sharply with the environmental toll of his space ventures.
Musk has called fossil fuel reliance "the stupidest experiment in human history" and has committed billions of dollars to clean energy technologies, while simultaneously aligning with Donald Trump who promotes fossil fuel extraction while chanting "drill, baby, drill".
Hundreds of millions of dollars that had been generated from Musk’s sustainable businesses have been used to support Donald Trump’s re-election. This is a president who has rolled back over 100 environmental regulations and withdrawn the U.S. from the global Paris Climate Accord.
His frequent use of private jets places him among the world’s top carbon emitters, while SpaceX’s rocket launches contribute significantly to atmospheric pollution.
While Tesla aims to reduce carbon emissions on Earth, SpaceX's activities contribute significantly to atmospheric pollution. A single SpaceX Starship flight can release up to 3,189.6 tonnes of CO2, equivalent to the emissions of 25,000 cars operating simultaneously. With plans to scale up launches for both tourism and satellite deployment, the cumulative environmental impact could rival or surpass that of traditional aviation.
These many contradictions cannot be ignored. Musk has built much of his success from having won the custom of those people that have chosen to live greener lives. Alienating them could be catastrophic for his businesses.
By aligning himself with figures like Trump, Musk risks eroding trust among environmentally conscious consumers and governments. Whether you are a climate change believer or denier is immaterial. This all comes down to credibility. It threatens to further erode Musk’s already severely damaged reputation. Layered on top of his political shenanigans, disingenuity will further diminish his popularity and damage his brands.
Vaswatharmy distancing himself from Musk
Just days into the role, biotech entrepreneur Vivek Ramaswamy withdrew from the Department of Government Efficiency (DOGE), where he was set to co-lead alongside Elon Musk. His decision stemmed from growing reputational concerns and tensions with Musk, particularly regarding criticism of Musk’s leadership style and controversial actions. Wary of being linked to efforts to dismantle federal agencies and allegations of unethical behavior, Ramaswamy opted to focus on his political ambitions in Ohio, distancing himself from DOGE to protect his own reputation.
Conclusion
Anti Musk sentiment is growing. See these videos as great examples in both the US and Europe:
Elon Musk’s entry into politics has been nothing short of disastrous, threatening both his legacy and the success of his enterprises. While he remains a transformative innovator, continuing down this path risks unraveling his achievements and endangering the commercial stability of his businesses.
His political gamble has already cost him billions - how much more is he willing to lose?
The leader of any company is its most important asset. History offers clear examples: John Sculley’s nearly bankrupted Apple, while Steve Jobs acts and decisions subsequently took the company to unprecedented heights. So public and private investors in Tesla or SpaceX need to ask themselves, ‘is Musk now an asset or has be become a liability?’
They say "No publicity is bad publicity", but Musk seems to have proven them wrong!
https://www.cnbc.com/2025/03/04/elon-musk-first-month-in-white-house-was-tesla-worst-month-since-2022.html
https://www.reuters.com/business/retail-consumer/teslas-german-car-sales-continue-their-decline-february-2025-03-05/
https://www.independent.co.uk/news/world/americas/crime/tesla-cars-power-stations-elon-musk-b2709001.html
https://www.npr.org/2025/02/27/nx-s1-5311609/tesla-sales-europe
https://www.journaldemontreal.com/2025/01/28/des-proprietaires-de-tesla-genes-se-dissocient-de-musk-je-lai-achetee-avant-quelon-devienne-fou
https://www.nytimes.com/2024/03/14/business/taiwan-starlink-satellite.html?auth=login-google1tap&login=google1tap
https://www.bbc.co.uk/news/articles/c5y7626l610o
https://qz.com/twitter-x-ad-revenue-tumbles-elon-musk-grok-1851624340
https://www.deseret.com/business/2024/10/02/x-twitter-loses-80-percent-value-elon-musk-advertising-revenues-antisemitic-tweet/
Even if you set aside the impact of Musk's unpopular political views, he has repeatedly overstated the capability of the technology that his companies are producing, and so much of this technology has been "just around the corner" for such a long time that nobody should take his leadership seriously anymore.
At the same time, his promises account for such a a large portion of the value of his companies that it's hard to separate the real value from the hype. But at some point you have to deliver what you promise (I'm still waiting on the affordable Tesla that Chinese companies are already outcompeting).
My assumption is that Musk is making decisions that are designed to increase his political influence more than his wealth in the hopes that it will lead to a bigger payoff (or, more likely, bigger risk reduction, considering the investigations that he has successfully halted).
Unfortunately behind a paywall, but in short: There are indications of inconsistencies in the Tesla reports. The source is allegedly the same person who also pointed to Wirecard. https://www.ft.com/content/62df8d8d-31f2-445e-bfa2-c171ac43db6e