Tesla car sales are falling, yet Musk is busy playing politics

[PCauto] In 2024, Tesla delivered 1.79 million vehicles worldwide, reflecting a decrease of approximately 1% from the 1.81 million units sold in 2023. This marks the first decline in deliveries for Tesla since 2017, with sales in January 2025 continuing to trend downward, particularly highlighted by a significant 47.48% decrease in Europe.

Notably, revenue from the automotive sector constitutes 78.8% of Tesla's overall business, underscoring its vital role as a primary revenue generator. In contrast, both Musk and his investors appear unfazed by the downturn, as there may be a perception that Tesla is not merely an automotive manufacturer but rather a technology enterprise.

However, as the CEO of a technology-focused company, Musk’s active involvement in the political sphere has coincided with the recent downturn in Tesla’s vehicle sales (Tesla's sales saw a dramatic decline of 36% in the U.S., along with decreases of 59.5% and 63% in Germany and France, respectively), which can also be partly attributed to his political expressions.

Tesla’s investors ought to note that Musk's political pursuits have intensified amidst these sales challenges. His engagement with initiatives within the Doge (Department of Government Efficiency) has increased, highlighted by a promotion on the social platform X where he has rebranded himself as “White House Tech Support.”

To Streamline US Government like X

To secure a role at Doge, Musk invested $260 million to support Trump’s bid for his second presidential term, signaling a strong endorsement of Musk's previous decision to streamline X by cutting 80% of its workforce. Trump, valuing Musk's operational efficiency, encouraged Musk to form Doge as a private advisor, hoping he would apply the same principles to enhance the functional efficiency of the U.S. federal government.

Following Trump’s inauguration, the newly established CDOEC (Chief Diversity Officer Executive Committee) was the first department eliminated.

Subsequently, Doge canceled over $420 million in government contracts and leases within 80 hours. On January 28, through U.S.  Office of Personnel Management, Doge and the Trump administration began to solicit voluntary resignations from federal employees, allowing them to retain pay until September 30, provided they resigned within the stipulated timeframe. Moreover, on February 2, Doge officials managed to enter and shut down the USAID institution, which had functioned for over sixty years. By February 5, Doge was urging employees from the FBI and CIA to resign, placing 9,000 jobs in jeopardy.

Doge's actions continue, exemplifying Musk's commitment to efficiency, with his top six engineers working diligently and providing daily updates on their progress through social media.

What is Musk doing this Doge job for? To "Make America Great Again"? Yes, but it's not all about it.

So shrewd as he is that people overlook his identity as a businessman

Musk is a shrewd businessman. His acumen for profit-generation is apparent, as he adeptly navigates opportunities presented by government support. Both SpaceX and Tesla initially reaped significant benefits from government contracts, establishing the foundation of Musk's business model reliant on government support.

In 2010, the Obama administration initiated a commercial crew program, creating growth avenues for private aerospace firms like SpaceX. Musk effectively showcased SpaceX’s technological advantages to the Obama administration, securing a pivotal $2.6 billion commercial crew contract with NASA, which solidified SpaceX’s trajectory. Concurrently, the U.S. Department of Energy extended a low-interest loan of $465 million to Tesla, assisting Musk in overcoming early financial hurdles. It can be said that Musk's success is inextricably linked to the Obama administration.

With the end of Obama's term, despite efforts to foster relationships with the subsequent Trump and Biden administrations, Musk faced indifference.

Trump exhibited little inclination towards electric vehicles, opting to support traditional automotive industries while announcing withdrawal from the Paris Climate Agreement, frustrating Musk, who subsequently exited Trump’s Coucil of Economic Advisers. A public confrontation ensued in 2022, Trump said: When Elon Musk came to the White House asking me for help on all of his many subsidized projects, whether it's electric cars that don't drive long enough, driver less cars that crash, or rocketships to nowhere, without which subsidies he'd be worthless, and telling me how he was a big Trump fan and Republican, l could have said, "drop to your knees and beg," andhe would have done it...

Under Biden’s administration, Musk experienced similar sidelining. He was not invited to the 2021 electric vehicle summit despite Tesla constituting two-thirds of electric vehicle sales in the U.S. Furthermore, Biden's backing of the war in Ukraine adversely affected Tesla's European operations.

In light of these challenges, it becomes evident that Musk has maintained closer ties with China, often expressing praise for the nation. This behavior accords with Musk’s intrinsic nature as a businessman: he aligns himself with those who can provide him benefits. Such actions do not classify Musk as negative; rather, they exemplify how effective business operations are conducted.

Profited from the U.S. government, while also under its constraints

At this point, it becomes clear why Musk is so closely connected to the U.S. government. Despite being the wealthiest individual globally, excessive government regulation remains a challenge. Trump, also from a business background, aims to reduce government intervention in the market, which has facilitated a reconciliation between Musk and Trump.

Musk perceives excessive government regulation as a manifestation of bureaucratic inefficiency. He contends that numerous federal employees create convoluted rules and justifications to legitimize their roles, thereby obstructing “Make America Great Again” and impeding humanity’s aspirations for extraterrestrial expansion.

In a recent agreement, NASA approved $4.4 billion for SpaceX to transport astronauts to the moon. However, the FAA (Federal Aviation Administration) postponed test launches, citing concerns about potential ecological harm due to SpaceX's activities.

Musk expressed frustration with the FAA’s prolonged regulatory processes, lamenting, “Unfortunately, we continue to be stuck in a reality where it takes longer to do the government paperwork to license a rocket launch than it does to design and build the actual hardware.”

Presently, Musk is facing at least 20 federal investigations, addressing safety issues related to Tesla vehicles, in addition to ongoing scrutiny over environmental damages caused by SpaceX missions.

Furthermore, Musk's financial landscape exhibits vulnerabilities, including a $20 million penalty from the SEC (Securities and Exchange Commission) in 2018 and a Delaware court ruling that deemed his requested $55 billion salary excessive.

Musk’s most remarkable attribute is his capacity for streamlining

While he is often perceived primarily as a figurehead in technology, Musk’s preeminent talent lies not in innovation but in his business acumen. Comparable to Edison, many mistakenly classify him as an inventor. In truth, both are exemplary businessmen.

As a businessman, Musk's core competency includes the ability to maximize profit through streamlining processes. He has optimized rocket engines, vehicles, and, most recently, X. He now seeks to reform the U.S. government, a methodology he refers to as “First Principles.” The question remains: is this genuinely the most appropriate approach?

Tesla consumers may experience discomfort resulting from Musk's push for efficiency. The new Model 3, for instance, has eliminated both the steering signal lever and gear shift lever, while the one-pedal driving mode compels users to adapt to Musk's preferences. This has raised awareness among users, who are increasingly resistant to Tesla's perceived arrogance.

As Musk dedicates himself to “Make America Great Again”, he may soon need to contemplate how to “Make Tesla Great Again.”