“Tesla has lost more than one-third of its market value since mid-December as Musk deepens his association with Trump.”1
Reputational damage is lethal. Gerald Ratner called his jewellery ‘crap’2 and within two years had lost his chain of companies. Tesla is identified with Musk personally. Tesla’s leadership in the mass electric vehicle (EV) revolution made Musk a multi-billionaire. EVs became, for a time, synonymous with Tesla.3
Keeping a sense of perspective as a multi-billionaire is challenging. Musk failed. He funded Trump’s 2024 election campaign with $277m and pivoted into politics. Multiple appearances at campaign events plus, Trump’s infatuation with extreme wealth, has given Musk unparalleled unelected power.
Musk believes he has unique managerial skills. He bought Twitter for $44bn by selling Tesla stock. He sacked 80% of the staff using his ‘infallible’ managerial ‘skills’.4 He rehired many of them days later because they held critical roles.5 Musk has reduced ‘X’’s (Twitter) valuation by 71%.6
Ever since the infamous Nazi salute (see Addendum) Musk made at Trump’s inauguration, Tesla has become toxic. Its stock market valuation has plummeted.7 Trump made a lame effort to ‘rescue’ Tesla with a ‘choreographed‘ purchase at the White House. (see Addendum) Subsequently it seems Trump’s endorsement was, as it were, bought with a linked payment.8
Trump is dazzled by Musk’s wealth and assumes he’s a genius. He nurtured Tesla when it was struggling but can he replicate that success?
“…successful management is often not portable, because an ability to overcome constraints in one business doesn’t guarantee an ability to do so in others.”9
Evidence suggests Musk doesn’t have transferable management skills. Musk’s other companies were established with Tesla being used as a cash-cow. ‘X’, Space X, Starlink and the Boring Company are interesting but don’t have Tesla’s stellar qualities. His X-style mass sackings of Federal government employees is chaotic.
The Trump administration has halted the sackings of hundreds of US federal employees who worked on America’s nuclear weapons programmes.10
Trump worships wealth and therefore Musk. This has clouded his judgment. Worshipping wealth and losing a sense of reality isn’t new. Adam Smith identified the problem in 1759,
“Ambitious pursuers of wealth are driven by the desire to deserve and to enjoy recognition for their excellence, but their judgment of what is truly excellent is corrupted by the standards of a wealth-worshipping society.”11
Musk is worth about $370bn and Trump worships him because he’s 100 times richer than he is.
Addendum: Two photos
Notes
1 Trump talks up Tesla in White House show of support for Musk
2 Gerald Ratner: Honesty Isn’t Always the Best Policy | Odeboyz’s Blog
3 In Britain his happened with ‘Hoover’ where all electric floor cleaning devices were known as ‘Hoovers’.
4 Elon Musk tells BBC he’s cut about 80% of staff since taking over Twitter | CNN Business His bizarre attitude towards business can be seen with this quote from the same source, “Musk also cracked jokes during the interview, saying that he was “no longer the CEO of Twitter” and had been replaced by his pet dog, a Shiba Inu named Floki.” This is reminiscent of Nero appointing his horse as counsellor. Incitatus – Wikipedia
5 Twitter trying to rehire workers Musk fired days ago, sources say | Fortune
6 X, aka Twitter, now worth 71 percent less than what Elon Musk paid for it | Mashable
8 Hours after Donald Trump announced that he was planning to purchase a Tesla, reports emerged that Elon Musk was considering a $100 million donation to a super PAC associated with the president. Source Hours after Trump promises to buy a Tesla, reports of Elon Musk’s plans to donate $100M to MAGA super PACs emerge The optics are appalling with Trump coerced into becoming a salesman for Musk.
9 Stumbling and Mumbling: Constraints
10 Trump administration tries to bring back sacked nuclear weapons workers
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