Tesla, once the darling of Wall Street and the undisputed pioneer of electric vehicles, is now reeling from one of the most catastrophic market losses in modern corporate history. In the span of just four months, the company has seen $800,000,000,000 evaporate from its market capitalization, prompting an outcry from board members and investors who now demand that CEO Elon Musk take full responsibility for the stunning implosion.
Never before has a CEO’s foray into political realms had such a devastating effect on the fortunes of a tech giant. Musk’s dual obsession with political power and personal legacy has now cast a long shadow over Tesla’s future, raising questions not only about his leadership but also the sustainability of the company’s valuation, product line, and consumer trust.
The downturn began after Tesla’s stock peaked in December last year, riding high on hopes for a breakout year in 2024. But when the company released its first-quarter earnings in April 2025, what emerged was a bleak and unsettling portrait: plummeting profits, slumping sales, and a CEO visibly more focused on national politics than vehicle production.
As a result, Tesla's valuation has been slashed nearly in half. Musk himself has lost approximately $100,000,000,000 in net worth, underscoring how deeply intertwined his personal brand is with the company's fate. The boardroom is now divided between those who still believe in Musk’s larger-than-life vision and those who view his political moonlighting as a dereliction of executive duty.
Musk’s role as the head of the so-called Department of Government Efficiency, or DOGE, under President Donald Trump’s new administration, has proven especially controversial. Although Musk recently vowed to scale back his government involvement and refocus on Tesla, his promise was a tepid one at best.
According to his own admission, he would still devote “one or two days per week” to political duties. For any ordinary CEO, such a commitment would be deemed outrageous. For Musk, who already divides his time among half a dozen companies, it amounts to a stunning level of distraction at a moment when Tesla needs his undivided attention more than ever.
Investors and analysts are increasingly vocal about this misalignment. While some initially tolerated Musk’s flirtation with Washington power dynamics—hoping it might yield favorable regulations for autonomous driving or renewable infrastructure—that gamble has failed to pay off. Despite some symbolic regulatory relaxations on self-driving vehicles, Trump has not abandoned his administration’s broader hostility toward electric cars or its aggressive trade war, which continues to damage Tesla’s global competitiveness.
Meanwhile, the DOGE initiative has sparked public backlash, with widespread consumer boycotts and protests erupting at Tesla showrooms. In hindsight, Musk’s MAGA-aligned political adventures have only added fuel to Tesla’s downward spiral.
But Tesla’s problems are not merely political. The company's fundamentals have deteriorated in alarming ways. Global car sales declined slightly in 2024 compared to 2023, and troublingly, a significant portion of Tesla’s profits no longer stems from vehicle sales but from carbon credit trading.
The product lineup, once a symbol of futuristic innovation, now feels stagnant and uninspiring. The long-promised affordable Tesla models remain absent, while Chinese EV manufacturers like BYD surge ahead with rapid innovation, superior pricing, and increasingly sophisticated autonomous driving technologies.
Tesla’s much-hyped Full Self-Driving rollout in China in February was met with widespread indifference. Local consumers, long accustomed to competitive domestic alternatives, showed little enthusiasm.
Technological stagnation has been compounded by strategic drift. While other carmakers continue to push boundaries in range, battery tech, and affordability, Tesla appears stuck in a state of self-inflicted paralysis. Musk’s attention seems more consumed by X (formerly Twitter), AI debates, and political commentary than by rethinking Tesla’s business strategy or reinvigorating its product pipeline.
Behind closed doors, some Tesla investors fear that Musk has simply grown bored of running a car company, preferring instead the thrill of global influence, ideological warfare, and “saving civilization” via side ventures.
Despite the chaos, Musk remains outwardly optimistic. Just last week, Tesla reaffirmed its plan to begin production of lower-cost models in June and teased a launch of its autonomous taxi service in Austin, Texas. Musk boldly proclaimed that Tesla is on the path to becoming the “most valuable company in history,” anchored by a network of driverless Cybercabs and a fleet of humanoid robots dubbed Optimus.
Yet this kind of visionary rhetoric now rings hollow to many investors, especially in the face of plunging market cap, declining sales, and evaporating goodwill.
Even after its recent implosion, Tesla’s stock remains well above its 2020 levels—an enduring sign of how much of its valuation is predicated not on traditional financial metrics but on faith in Musk’s dreams. If Tesla were to be valued like any other legacy automaker, the gulf between perception and reality would become all too apparent.
In many ways, Tesla remains a speculative instrument more than a stable enterprise. And that speculation is tethered entirely to Elon Musk.
For now, that tether is fraying. Calls are growing louder for Musk to step down as CEO—or at the very least, to appoint someone fully committed to the day-to-day demands of the role. Some board members argue that Tesla would benefit immensely from becoming a more “normal” company in terms of governance.
This perspective was reinforced earlier this year when a Delaware court scrutinized Musk’s $55 billion pay package and found disturbing levels of boardroom cronyism, with multiple directors having close personal ties to the CEO. That ruling punctuated a broader discomfort with how the company has been run more like a personal empire than a public corporation.
The board’s anger is not rooted merely in dollars and cents. It stems from the mounting sense that Tesla—once hailed as the vehicle of the future—is veering off course. Musk’s genius as an entrepreneur is unquestioned. He has already secured his legacy as one of the great business minds of the 21st century.
But legacy alone cannot guide a company through existential challenges. It requires focus, discipline, and strategic clarity—traits that are incompatible with livestreaming from Mar-a-Lago or battling ideological foes on social media at 3 a.m.
Ultimately, the question is not whether Elon Musk is capable of greatness. He is. The question is whether he is willing to recommit himself to the company that made him a legend. If not, the future of Tesla may need to be charted by someone else—someone with both hands on the wheel and eyes firmly on the road ahead.
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