A Warning From Elon Musk, Tesla and DOGE - TBL

The rules of business still apply to Elon, because they apply to every leader

Doubting Elon Musk has rarely been a good strategy, but he might be facing his toughest odds yet. Regardless of your opinion of Musk, it’s clear his balancing act between his businesses and the Department of Government Efficiency (DOGE) isn’t going well. This has been especially visible in his largest business role: CEO of Tesla.

Last week, Tesla announced its Q1 earnings, reporting a 71 percent decrease in profit between Q1 2024 and Q1 2025, and a 20 percent drop in revenue for its automotive division in that same span. This was the latest setback for the company and its first meaningful decline in its core auto business since the pandemic economic shock of 2020.

In response, Musk announced on Tesla’s earnings call that he would be stepping back from DOGE, the government operation he has been very publicly leading, and devoting much more time to Tesla to get the company back on track. Tesla’s stock rallied significantly after the news, suggesting that investors eagerly anticipate Musk refocusing on the company that’s made him the world’s richest person and brought massive returns to his shareholders.

While Musk has seemingly made a career of overcoming insurmountable obstacles, the carnage at Tesla shows that the rules of business leadership still apply to him. In particular, Musk’s recent saga highlights two key phenomena that most business leaders must manage today: the risk of founder-centric branding, and the cost of losing focus.

Tesla’s Brand Problem

Tesla’s market cap has steadily grown in proportion to Musk’s own fame and success, with his personal brand boosting Tesla’s performance as investors bet on his ability to deliver in the future.

Musk’s persona as a maverick tech genius trying to save the planet from climate change helped create a huge market for Tesla. While environmentally conscious liberals were the key early demographic for Tesla, Musk’s personal brand attracted people who weren’t previously interested in early EVs like the Toyota Prius and the Chevy Volt. Many young urban professionals were drawn to both Musk’s brand and his vision, driving Tesla to become the world’s most valuable car company without spending over $1 million in advertising in a single year before 2022.

But Tesla’s recent struggles highlight how a CEO-centric brand can become a weakness almost overnight. Musk’s entry into presidential politics in July 2024, his dedicated campaigning for Donald Trump, and his very prominent role in Trump’s administration through DOGE, help to alienate him from a core part of Tesla’s customer base. However, Musk didn’t just drift away from this group; he actively antagonized them, publicly criticizing many of the values and causes that had once attracted buyers to Tesla in the first place.

Musk’s public brand shifted from “cool, audacious inventor” to “extremely polarizing political figure” in a matter of months. A significant number of Tesla’s early supporters—especially the previously mentioned environmentally conscious liberals—declared they would never buy a Tesla again. Some even sold their Teslas or added bumper stickers with phrases such as “I bought this before we knew Elon was crazy” to distance themselves from his brand. Given that owning a Tesla seems to require an apology for so many owners, it’s hard to deny that Musk’s sharp political shift has been very bad for business.

We’re in an era of personal brand dominance, where there’s hardly any daylight between a founder/CEO and their company. Steve Jobs pioneered the trend, and tech founders like Mark Zuckerberg, Jack Dorsey and Sam Altman continue to be the top spokespeople for their companies. Musk was a success story for this strategy, but he may soon join cautionary tales like Adam Neumann, whose antics tanked WeWork, and Sam Bankman-Fried, whose illegal activity harmed the entire cryptocurrency industry.

Today’s customers and investors are buying the brand of the founder as much as the brand of the product or business. This creates an acute form of founder/CEO risk where a leader’s personal actions and reputation can directly boost or erode the value of the company itself.

Knowing this, it’s incredibly important to ensure that your personal brand is authentic, sustainable and aligned to your core customer. Whether Musk’s previous environmentally conscious liberal persona was sincere or a marketing tactic, it was apparently malleable. Today, Musk isn’t just misaligned with his core customers; he’s actively antagonizing them. Furthermore, he’s not just attracting controversy—he seems to crave it. And Tesla’s team and shareholders are paying the price.

The Cost of Being Unfocused

Musk has always been a serial entrepreneur, and his status as CEO of five companies—Tesla, X, SpaceX, the Boring Company and Neuralink—was long held up as a sign of his extraordinary work ethic and productivity. But Tesla’s rough 2025 has flipped this narrative quickly: Musk’s multi-tasking has drawn sharp criticism, including by prominent Tesla investors, as a sign that he’s lost focus and attention.

At the same time, competition has escalated in the EV market: rivals like China’s BYD have gained significant ground, solid-state battery technology is becoming a reality, and customers now have far more EV models to choose from than existed when Tesla first rose to dominance. Meanwhile, Tesla’s own product cycle has slowed, and key promises like fully autonomous cars, robotaxis, and next-generation vehicles have repeatedly missed projected timelines. These misses have eroded both consumer trust and investor confidence, and Musk hasn’t exactly been dedicating full time effort to addressing these issues.

Plus, Musk hasn’t been quietly working on a side project while Tesla has slumped. His work with DOGE was the biggest news story of 2025 before April’s tariff chaos, and he’s clearly spending a lot of time posting on X about topics that have nothing to do with his businesses. So not only has Musk been seemingly distracted from his companies, but that lack of focus constantly attracts enormous attention.

As I’ve written before, a CEO’s essential duties are ensuring a company maintains a strong product/market fit and excellence in operations, people and culture. Tesla has struggled in both areas, and Musk hasn’t dedicated his time to visibly addressing either problem. Being the CEO of a company that once carried a trillion-dollar valuation is realistically not a part-time job, and Tesla’s recent struggles have made that fact impossible to ignore.

Leaders cannot be absent in these challenging moments, when everyone at the company looks to them for guidance and inspiration. Tesla investors’ discomfort with Musk’s political career has been widely reported, but I can’t help but wonder what Tesla’s leaders and employees have thought as the company has struggled while he has deeply engaged in politics.

Again, betting against Musk has generally failed. He has reinvented his reputation several times and overcome seemingly impossible odds. But while he may very well be able to turn things around, the brand damage he has inflicted on Tesla does not feel like something that can be repaired overnight, or even anytime soon.

Tesla’s horrible results should not have been a surprise to anyone who has been paying close attention, and the fact that things deteriorated to this degree for the world’s most famous entrepreneur is a warning to all leaders. While there are many facets to great business leadership, nothing is more important than being the relentless steward of the company’s brand and keeping a laser focus on its core products, market, and operations. Take your eye off either one, and the consequences are almost always swift and unforgiving.

Musk’s fiercest critics have called him “The Shadow President.” I can’t speak to that, but I do think it’s clear that being a Ghost CEO at Tesla isn’t going to work.

The Better Leader (TBL) is a bi-weekly newsletter that delivers a strategic playbook for leaders, drawn from my 20 years of leadership experience and insights from top CEOs and leaders I’ve worked with. Each edition is concise and tactical, providing frameworks you can implement immediately to elevate your leadership. TBL is available exclusively to Friday Forward premium subscribers.