The billionaire entrepreneur, who backed former US president Donald Trump with nearly $300 million according to Reuters, has faced mounting scrutiny over conflicts of interest and the impact of his political persona on his companies’ performance.
On Saturday, Musk’s social media platform X suffered a major outage, impacting tens of thousands of users in the US. Soon after, Musk signalled a shift in priorities. “Back to spending 24/7 at work and sleeping in conference/server/factory rooms. I must be super focused on X/xAI and Tesla (plus Starship launch next week),” he posted on X.
Tesla takes the biggest hit
Tesla, more than any other Musk-led company, has borne the brunt of his political alignment. His vocal, often polarising, political posts and public support for Trump triggered protests and boycotts, especially in parts of Europe, which Musk has called Tesla’s weakest market. Vandalism of Tesla vehicles surged, with some owners putting up stickers reading: “I bought this before I knew Elon was crazy.”
In its Q1 FY25 earnings, Tesla reported its first annual decline in vehicle deliveries, along with a steep drop in revenue and net income. The company cited weakening demand, shifting political sentiment, and “rapidly evolving trade policy” as key challenges. Investor concerns about Musk’s divided attention reached a peak earlier this year. As Chinese EV players like BYD scaled up aggressively, Tesla faced pressure to defend market share in key global markets. In May, Musk said he had reduced his time at DOGE to just one or two days per week but added that he would stay “as long as the president would like me to do so.”
Discover the stories of your interest
Conflict of interest concernsMusk’s leadership of DOGE—a federal body created to streamline government processes—sparked widespread concern over conflicts of interest, especially given his ongoing control over multiple high-stakes technology firms.
In April, reports emerged that DOGE was encouraging federal agencies, including the Social Security Administration, to migrate communications to X—raising data privacy and monopoly concerns. There were also internal memos suggesting DOGE was promoting the use of Musk’s AI chatbot, Grok, for government data analysis.
While Musk maintained that DOGE aimed to eliminate bureaucratic inefficiencies, critics argued it gave him unparalleled access to sensitive government data and the ability to influence regulatory outcomes in favour of his companies.
SpaceX setbacks, Starship relaunch
SpaceX has also faced a bumpy ride. On March 6, the company conducted the eighth integrated flight test of its Starship system. While the Super Heavy booster landed successfully—caught by the Mechazilla arms at the launch site—the Starship upper stage failed during its ascent burn.
During the previous launch, the upper stage suffered a propellant leak and caught fire in its “attic” section shortly after stage separation.
Despite these issues, Musk struck an optimistic tone at the Qatar Economic Forum last week, saying Tesla sales were already rebounding and that the company’s market capitalisation had again crossed $1 trillion. He also warned those who attacked Tesla dealerships, stating: “We are coming for you.”
As Musk refocuses on his core ventures, investors and industry observers will be watching closely to see whether the pivot from politics to product can help him regain momentum across his sprawling tech empire.
