Tesla’s stock (TSLA) surged on a report that Elon Musk is leaving the Department of Government Efficiency (DOGE) soon. Investors appear happy that Musk will spend more time on Tesla, even though the company’s brand issues are linked to Musk.
Tesla’s stock dove by 5% after it announced its Q1 delivery results, which were far below expectations.
Yet, the stock quickly recovered and is now up 5% despite upcoming revisions from analysts, who will have to adjust their expectations for the company’s full-year after the overestimated deliveries in the first quarter.
The quick recovery appears to be linked to a new report from Politico that claims Trump “has told his inner circle, including members of his Cabinet, that Elon Musk will be stepping back in the coming weeks from his current role.”
It’s unclear if Musk is being pushed out or if he is leaving of his own accord.
The Tesla CEO just spent more than $25 million on the losing Republican candidate in the Wisconsin Supreme Court election over the last few weeks, and his efforts at DOGE have grown increasingly unpopular.
The department has consistently overreported its claimed savings and made several major mistakes that it had to retract. This is in addition to its cuts made on purpose, which are also widely unpopular with a large part of the US population.
Musk’s political donations to Trump and his involvement in DOGE have led to massive protests against Tesla, which many see as the CEO’s personal piggy bank to finance the rise of fascism in the US.
Electrek’s Take
I am not sure what investors see in this. Do they think Musk getting out of DOGE will help with brand issues, or do they believe Musk spending more time at Tesla is a good thing? Or both?
I think Tesla’s brand issues are far from over with Musk leaving DOGE. On the contrary, the damage has been done, and his spending more time with Tesla will just make it harder to dissociate him from the brand.
As for spending more time at Tesla helping the company operationally, that’s delusional. Most of Tesla’s problems are due to Musk. Tesla launched a single new vehicle in the last 5 years, and it’s a flop: the Cybertruck.
That’s because he has bet everything on self-driving and that’s failing too.
I think Tesla has become a complete meme stock, and its value almost entirely hinges on people believing Elon Musk is a super genius and not a compulsive liar despite all the evidence to the contrary.
FTC: We use income earning auto affiliate links. More.
