After his earlier chequered history of publicly criticising Trump, eyebrows were raised when the billionaire threw his significant financial support behind the Republican campaign in the final race to the November presidential election.
It was not long after the election that Trump named Musk the co-lead for the Department of Government Efficiency, or DOGE for short, a reference to Musk’s fascination with the cryptocurrency of the same name.
It was a department that didn’t exist and could not be created without congressional approval. However, to avoid this additional layer of complexity, Trump signed an executive order on the day of his inauguration that said, “The United States Digital Service is hereby publicly renamed as the United States DOGE Service (USDS).”
The early red flags
Musk’s own erratic behaviour at the inauguration – alongside his other “tech bros” – even then had some commentators questioning his suitability to influence government decision making and policies.
These observations compounded the concerns that had persisted since November about the prospects for the long-term durability of such a close relationship with Trump, let alone the Mar-a-lago followers or US political orthodoxy. Given Musk’s tendency towards contrarianism, his sudden passion for involvement within conventional authority of government agency seemed to be at odds.
Nonetheless the work of DOGE commenced with Musk’s role always remaining loosely defined. And then the mistakes started coming to light; for example, the firing and rehiring of nuclear safety experts, providing editing access to Treasury records for inexperienced computer specialists and claims of finding social security recipients over 150 years old. This was combined with the significant reorganisation of long-established government functions, including USAID (United States Agency for International Development) and the National Parks Service that itself resulted in large scale job losses and disruptions.
During this time, the estimated value of savings identified by DOGE was constantly over-estimated while being used as the key indicator of DOGE’s success. Some aspects of this flurry of confusion have now been called out.
The fall of DOGE
This week, Democrats senator, Elizabeth Warren, released a report with 130 accusations about the work of DOGE and the ways that it has benefitted Musk’s business interests. While it will struggle to get attention in the Republican dominated realm of US federal politics, it does formalise many of the speculations and rumours that had been getting aired on social media since January.
But the writing was already on the wall. By March and just eight weeks after the creation of DOGE, Trump indicated that Musk was “on his way out” and that his relationship with DOGE was always time-defined and due to end around the end of May 2025.
During the same period, Musk had his own parallel challenges. Linking himself so closely with the Trump presidency and with his own personal brand tied to his businesses interests, there were consequences.
The impact on X and Tesla
Frustration over the work of DOGE spilled over to make X and particularly Tesla, targets for direct action. Multiple cases of the electric vehicles being firebombed and graffitied were reported in the USA, France, Italy and elsewhere.
At the same time, global sales started to slide with the most dramatic drops being in Europe, resulting in a 41% year-on-year drop in earnings by April.
The loop was closed with the Cybertruck increasingly adopted by Trump supporters as a symbol of their political loyalty only reinforcing the increasing toxicity of the brand. Social media and blog magazines even began offering lists of “insulting nicknames” for Teslas, with many finding clever ways to weave in references to the extreme right-wing ideological versions of national socialism.
It all came to a head – arguably exactly as expected – this week. The trigger for the split is publicly Musk’s displeasure over Trump’s “One, Big, Beautiful Bill.”
His concerns can be distilled down to him taking offense at the estimated cost of the bill effectively wiping out the claimed savings of the DOGE work since January. Musk’s belief that the Bill is not the right direction is summarised in his own social media response that it is “a disgusting abomination.”
It is an indication of Musk’s own underlying political views that it has seen libertarian politicians also share their concerns in a similar manner. By taking this position, arguably neither left or right, while still divisive on many specific issues (Musk’s view on transgender rights is well documented) may provide a more neutral ground for his business roles.
With many of his company’s privately held it is difficult to quantify the effect of Musk’s time “in government” on the Boring Company, X or SpaceX. Only Tesla’s stock can offer some indication of the situation in real time.
In March it was estimated that Musk has lost $100 billion off his net worth and that SpaceX was now his most valuable property (exceeding Tesla). More tangible was the sell off of $115 million of shares by Tesla board members around this time. Although it has shown upward signs in the last few days, Tesla share prices have not come close to reaching levels they were at their peak in December 2024, but do still remain higher than most of 2023 and 2024.
Can Musk turn things around?
If Elizabeth Warren’s dossier of accusation is taken at face value, it could be argued that Musk’s role in DOGE has at least managed to stifle any further downward slide. However, a key element of maintaining the current stock value will still require the company to return to selling EVs at the volumes that were seen in 2024 and this will ultimately be determined by consumers.
It is still too early to know if Musk’s star will rise again to influence a u-turn on current consumer preferences.
