Elon Musk Faces New Business Hurdles Amid Various Controversies

Elon Musk’s business empire faces unprecedented challenges as Tesla stock plummets, X platform suffers cyberattacks, and his political activities alienate customers and investors alike.

Key Takeaways

Tesla shares dropped 15.4% to $222.15, marking a 40% decline from recent highs, amid concerns about Musk’s political activities and declining sales.
Musk’s X platform has experienced multiple outages attributed to cyberattacks, adding operational concerns to his business portfolio.
Tesla’s customer base of environmentally-conscious liberals appears to be turning against the brand due to Musk’s vocal support for Donald Trump and other conservative politicians.
Musk’s role as head of the Department of Government Efficiency (DOGE) has coincided with Tesla losing nearly $800 billion in market capitalization.
Despite mounting challenges, Musk remains publicly unfazed, stating Tesla “will be fine long-term” while acknowledging he’s running his businesses “with great difficulty.”

Tesla’s Dramatic Market Decline

Tesla’s stock has faced a precipitous decline, falling 15.4% to $222.15 in recent trading – its lowest point since October. This significant drop represents a 40% decrease from recent highs when shares traded at $479. Market analysts attribute this decline to multiple factors, including increasing competition in the electric vehicle market, particularly from Chinese manufacturers like BYD, which has surpassed Tesla in global EV sales. Additionally, UBS Global Research has predicted further troubles ahead, forecasting a 5% drop in Tesla deliveries both for the first quarter and the full year compared to 2024.

“Our UBS Evidence Lab data shows low delivery times for the Model 3 and Model Y (generally within two weeks) in key markets which we believe is indicative of softer demand,” noted UBS Global Research.

The company faces declining sales not only in its largest U.S. market, California, but also globally, with a reported 45% drop in Europe. To counter this trend, Tesla has implemented aggressive discounts and incentives in the U.S., suggesting growing concern about maintaining sales volumes. The highly anticipated Cybertruck launch has also reportedly failed to meet expectations, further dampening investor enthusiasm.

Political Activities Impacting Business Performance

Musk’s increasing political visibility appears to be affecting Tesla’s business performance. His $270 million investment in Donald Trump’s 2024 presidential campaign, coupled with his appointment as head of the Department of Government Efficiency in the incoming administration, has coincided with significant business challenges. Since taking on this governmental role, Tesla’s market capitalization has reportedly decreased by over 50%, representing a staggering loss of nearly $800 billion in shareholder value.

Tesla showrooms across the United States have reportedly experienced protests and vandalism, with some customers displaying anti-Tesla bumper stickers on their vehicles. The #TeslaTakedown movement has gained traction among consumers who previously aligned with the brand’s environmental messaging but now reject its association with Musk’s political stance. This alienation is particularly concerning as Tesla’s traditional customer base has typically consisted of wealthy, environmentally-conscious liberals.

X Platform Under Cyberattack

Adding to Musk’s challenges, his social media platform X (formerly Twitter) has experienced multiple outages in recent days. Musk has attributed these service disruptions to a “massive cyberattack” by what he described as a “large, coordinated group and/or a country.” These technical issues have raised questions about the platform’s infrastructure and security measures, coming at a particularly inopportune time as Musk juggles multiple business and political responsibilities.

“Massive cyberattack” Musk wrote regarding the X outages, later elaborating that it came from a “large, coordinated group and/or a country.”

The timing of these outages coincides with broader concerns about X’s operational stability since Musk’s acquisition of the platform and subsequent restructuring, which included significant staff reductions. These disruptions impact not only the platform’s user experience but also its reputation among advertisers, many of whom had already reduced spending following controversial content moderation changes.

Musk’s Response to Multiple Crises

Despite the multifaceted challenges facing his business empire, Musk has maintained a publicly unfazed attitude. When commenting on the stock market decline and platform outages, he quoted Monty Python, writing “Always look on the bright side of life!” This cavalier response has prompted some investors to question whether Musk’s previous confidence remains justified given the mounting operational and financial concerns across his portfolio of companies.

“With great difficulty,” Musk acknowledged when asked how he was managing to run his businesses while also assuming government responsibilities, though he maintained that Tesla “will be fine long-term.”

Musk’s work with the Department of Government Efficiency aims to reduce federal spending and employee numbers, with claims of already achieving significant progress and $4 billion in daily savings. However, these savings estimates have been questioned by some analysts, and certain claims have reportedly been removed from the DOGE website. Meanwhile, SpaceX has faced its own challenges, with a recent rocket explosion over Florida adding to the constellation of issues confronting Musk’s various business ventures.