Trump’s Musk gamble has backfired

WASHINGTON DC – After describing claims earlier this month of his imminent departure from President Donald Trump’s inner circle as “fake news”, Elon Musk made it official late on Tuesday – he will no longer be serving full-time at Doge, the so-called Department of Government Efficiency created by Trump to trim public spending that the White House deems “fraud and waste”. 

“The large slug of work necessary to get the Doge team in place and working in the government to get the financial house in order is mostly done”, Musk told investors in his beleaguered electric car company Tesla. He said that beginning in May, his “time allocation to Doge will stop significantly”, and projected that he would spend “1-2 days per week as long as the President wants me… just to make sure the waste and fraud that we stopped does not come roaring back”. 

Musk’s suggestion that Doge’s mission has now been accomplished came on the day that Tesla announced its profits fell by a massive 71 per cent in the year’s first quarter. The disclosure stunned financial analysts who anticipated a slowdown in the business, given both the public’s growing hostility towards Musk and the effects of Trump’s trade war on the car industry. But the total evisceration of the company’s balance sheet was not widely expected.

Musk’s political gamble, bankrolling Trump in the latter stages of the 2024 presidential election campaign and then securing a position at the helm of Doge that placed him at the centre of power in Washington, now appears to have backfired massively. Latest polls show that he has become one of Trump’s biggest political liabilities, with one survey this month showing 60 per cent of the public had an unfavourable view of Musk personally, and 58 per cent of voters disapproving of the work conducted by Doge.

Doge – which is not a real government department, since none of the necessary congressional action was even requested by the White House to create it – has, by Musk’s own admission, failed to make the massive public spending cuts he promised. Both Trump and the man who spent most of the President’s first 100 days acting as America’s de facto prime minister, initially spoke of cutting $2trn in federal spending. At a Cabinet meeting this month, Musk conceded that he had trimmed only $150bn in public expenditure, leaving his operation more than $1.8trn short of its original goals.

Musk’s service as a “special government employee” allows him to spend only 130 days in any year at the President’s side. With Trump nearing his 100th day in office, it is not clear how Musk has been calculating the number of days he has worked on the government’s behalf, nor whether he has sufficient time available to continue providing his services for “1-2 days per week” until New Year’s Eve.

But it is apparent that his own business empire is dramatically suffering, and Tesla especially is in need of urgent attention from the man who turned it into the world’s leading electric car manufacturer, but has now watched vandals defacing his vehicles across America and attacking his dealerships.

Musk’s efforts to shore up sales through deep discounts on new car purchases, zero per cent loans and other incentives have largely failed, as American motorists recoil from his political positions and dub his vehicles “Swastikars”. Trump’s personal purchase of a Tesla during an event last month that turned the White House grounds into a car showroom did nothing to turn the company’s fortunes around.

Overseas, Musk’s ongoing support of far right figures in the UK, Germany and South Africa have also damaged Tesla’s international business prospects.

But other elements of Musk’s business empire have demonstrably benefited from his time in government. In eviscerating government agencies like the Consumer Financial Protection Bureau, he was able to head off scores of customer complaints about his products. Elsewhere, his efforts to cut government “waste and fraud” saw several regulators of his own industries either placed on administrative leave or fired.

Musk has also taken steps to grow the footprint of his Starlink internet business within government agencies. NBC News reports that at least seven federal offices within the Pentagon and the Commerce Department awarded contracts to the business shortly after Trump’s inauguration. Musk has also promoted Starlink as a solution to problems that he claims are besetting America’s air traffic control system.

SpaceX, Musk’s rocket business, continues to enjoy $22bn in federal government contracts, and the news agency Reuters reported that the company was expected to play a significant role in the creation of Trump’s proposed “Golden Dome” missile defence shield to protect the United States from airborne incoming attack.

Turning Tesla’s financial woes around now appears to be on Musk’s front burner, and in stepping back from his government service he is tacitly acknowledging the extent to which his efforts at public service have created spectacular corporate blowback for him. But despite being loathed by many other members of Trump’s inner circle, he remains the richest man in the world, with the financial capacity to influence American politics and elections for years to come.