Why Is Elon So Bent Out Of Shape?

In response to renewed complaints from Musk about the Big Beautiful Bill, Trump said yesterday,

We might have to put DOGE on Elon. You know what DOGE is? The monster that might have to go back and eat Elon. Wouldn’t that be terrible? He gets a lot of subsidies.

At the same link,

The president’s ire comes after Musk expressed his frustration over the sweeping spending bill on social media ahead of Tuesday’s Senate vote.

“The latest Senate draft bill will destroy millions of jobs in America and cause immense strategic harm to our country!” the 54-year-old wrote on X Saturday.

“Utterly insane and destructive. It gives handouts to industries of the past while severely damaging industries of the future.”

On Monday, the world’s richest man continued his criticism, saying lawmakers who had campaigned on cutting spending but backed the bill “should hang their heads in shame!”

. . . Trump said Tuesday his former ally was upset over a Biden-era electric vehicle mandate that was reversed by the new bill.

“Elon Musk knew, long before he so strongly Endorsed me for President, that I was strongly against the EV Mandate,” the prez wrote on Truth Social.

Opinions vary on the potential effect on Tesla of the EV mandate phaseout. According to Fox Business,

"Getting rid of this $7,500 tax credit should not impact [Tesla] sales," automotive expert Lauren Fix told FOX Business. "People buy Teslas because they like the product… They know what their customers want, and those that like Teslas will continue to purchase that product."

But according to CNN,

In a note to clients the day after the election, Garrett Nelson, an analyst for CFRA Research, wrote that ending the credit “will widen Tesla’s competitive moat by making competing EV models even more uneconomic, as we believe (Tesla) is the only profitable manufacturer of EVs.”

But now, Nelson is expressing worry over Tesla’s value if the credits go away.

“Our view is the ‘Big Beautiful Bill’ would be a net negative for Tesla, as tax credits for EVs, energy storage and solar would be going away,” Nelson said in response to questions from CNN. “That, and ongoing EV market share losses in China and Europe, are some of the primary reasons why we downgraded the stock in April.”

Elsewhere at CNN:

Tesla (TSLA) is expected to report yet another quarter of declining global sales on Wednesday, a not-unexpected stumble after months of falling revenue thanks to increased competition in the EV market and no small amount of reputational damage stemming from Musk’s role as President Trump’s “first buddy.”

Now, you might imagine that if you’re the CEO of a company with sales of its core product in rapid decline you’d want to, like, avoid any public squabbles that would further undermine investors’ confidence in your leadership.

Or, you could take the Musk route.

. . . “This BFF situation has now turned into a soap opera that remains an overhang on Tesla’s stock,” Wedbush analyst Dan Ives, a longtime Tesla defender, said in a note to clients Tuesday. “Tesla investors want Musk to focus on driving Tesla and stop this political angle… being on Trump’s bad side will not turn out well, and Musk knows this.”

Ives remains bullish on Tesla, but in recent months he has been speaking out about the damage Musk’s political swings have done to the company’s image, which isn’t helping the company’s sales problem.

Another factor that none of the published stories mentions is the fear factor among prospective and current Tesla owners that people will vandalize their cars out of anger at Musk. Thus I've been seeing Tesla bumper stickers like the one above, which are presumably aimed at disarming potential vandals who might think the owner endorses Musk and DOGE. This, of course, is almost as bad as a product getting a reputation for making people sick or killing them -- buy a Tesla, and someone might key it. Who needs that grief?

But I've already mentioned what I think is Musk's real worry:

in the end, Musk works for his corporate boards of directors, who give him his options, his bonuses, his perks, and his planes, and right now, they aren't happy.

Back to the second CNN link:

Tesla shares, the backbone of Musk’s personal fortune, are down 37% from their post-election peak, when Musk was becoming a fixture at Mar-a-Lago. The thinking on Wall Street back then was that Tesla’s problems were manageable, and that any blowback from the company’s liberal base would be outweighed by the benefit of having Musk in the White House, influencing regulations.

It might have worked, briefly. But the pair’s falling out now has investors worried Trump will aim his retribution directly at Tesla.

Board members have a fiduciary duty to act in the interests of investors:

As a board member, your fiduciary responsibility is to act in the best interests of the company and the shareholders you serve.

Having a fiduciary duty is an important responsibility. Damages could be awarded to beneficiaries if a fiduciary fails to fulfil their duty, and this is called a breach of fiduciary duty.

The most important job of a corporate board is to hire and fire the CEO; in the case of Musk's companies, Musk himself. I've got to think the boards of Tesla and SpaceX are getting pretty nervous. The problem is that Musk is having a hard time staying focused and dealing with the pressure, but given the turmoil in his personal life, that shouldn't have been a surprise to anyone. As Trump says, he may well wind up back in South Africa. Trump has a lot of insight.

It's also worth noting how skillfully Trump has played Musk over the past year. If you think about it, a comparative pauper, he's squeezed the richest man in the world for all he was worth. And even before that, Musk bought Twitter/X at a big loss mainly to give Trump a platform, while Trump was running a competitor, never needed X, and still doesn't. Deep down, I have a feeling Musk, supposedly a smart guy who nevertheless dated Amber Heard, knows he got rolled by Trump, who I think is actually a much smarter guy.