Tesla in freefall and rows with Trump’s tariff adviser - inside Elon Musk’s meltdown (2025)

The wording of the statement issued by White House press secretary Karoline Leavitt was typically forthright. Responding to a Politico exclusive claiming that Donald Trump had told his inner circle and cabinet members that Elon Musk would be stepping back from his White House role in the coming weeks, Leavitt took to X to brand the “scoop” as “garbage”, adding: “Elon Musk and President Trump have both publicly stated that Elon will depart from public service as a special government employee when his incredible work at Doge is complete.”

That’s what’s known in the trade as a “non-denial denial”. The decision on the “incredible work at Doge” could equally come tomorrow morning or at the conclusion of Trump’s putative third term in January 2033. It’s vague. There has been talk of a May departure, and it remains to be seen how Musk’s spat with Trump’s top trade adviser Peter Navarro will play out.

He has called him a moron, “dumber than a sack of bricks” before apologising to some bricks. Musk’s comments about the US and Europe moving towards a zero-tariff situation may have also irked his boss, while his brother Kimbal has also weighed in, calling Trump’s tariffs a “permanent tax on the American consumer”, adding that the China-US standoff is “not a game that should be played by C-minus students like Peter Navarro”.

When asked about the Musk-Navarro feud in a briefing on Tuesday, Leavitt said: “Look, these are obviously two individuals who have very different views on trade and on tariffs. Boys will be boys, and we will let their public sparring continue.”

But it is undeniable the clouds around Trump’s first buddy are gathering – could the days of “peak Musk” have passed us by? Not only have tech stocks suffered serious losses since Trump announced his tariffs, but Musk’s Tesla car business was already taking a hammering when tariffs were merely a glimmer in Trump’s eye.

Thanks to the tech billionaire turning into a global hate figure, as well as China producing cheaper electric vehicles, new figures released last week showed that Tesla delivered 13 per cent fewer cars in the first quarter of this year. Together with tariffs, hostility to US interests from Beijing, and Trump’s plan to scrap the electric car mandate, Tesla’s chances of reviving its fortunes are looking further away than ever – one can see the irony.

However, while watching such an intrinsically odd and irritating man metaphorically fall to earth more precipitously than any mortal before him might bring joy to millions – if not billions – of people, reports of the demise of Musk’s business empire are certainly exaggerated.

The most recent authoritative estimate of the man’s wealth was published in Forbes magazine’s latest list of individuals on the planet known to be worth more than $1,000m. Musk tops the chart, at $342bn, pulling significantly ahead of long-term tech rivals Mark Zuckerberg ($216bn), co-founder of Facebook and CEO of Meta, and Jeff Bezos ($215bn), founder of Amazon.

While they have to settle for silver and bronze in this event, Musk is up there with the American oligarchs of a previous “golden age” – John D Rockefeller and Andrew Carnegie – as one of the wealthiest plutocrats of all time. (By comparison, Trump ranks 700th, with an estimated worth of $5.1bn.)

It is true that a combination of conventional commercial pressures and the loathing he has provoked among his erstwhile liberal customers has tanked the sales and market valuation of his Tesla car company. But if this is rattling Musk, he’s not showing it.

He is confident that Tesla can recover its technical edge with the much-vaunted and perpetually delayed arrival of a fully autonomous, self-driving robotaxi: the Cybercab. This vehicle, we’re told, will be so innovative that when it arrives next year that it won’t even have pedals or a steering wheel.

About three-quarters of Tesla’s worth as a company constitutes a “bet” that the Tesla brand will once again revolutionise our lives, particularly with the hope that the Tesla robot, Optimus, will replace humans in mundane jobs and create a truly leisure-based economy. Trump wiped almost $100bn off Tesla’s value in a week, but it is still worth $750bn: compare that with peers such as Toyota ($160bn) or BYD ($150bn).

Musk is so wealthy that he can easily shrug off a paper loss of $30bn in his Tesla holding in a single day, as has happened. Even if the whole Tesla enterprise collapsed, he’d still be left with around $250bn.

But, being Musk, it’s a bit more complicated than that.

As he offered part of his Tesla holding as collateral for the loans he raised in 2022 to buy Twitter – now renamed X – if Tesla’s share value drops below a certain level, Musk becomes liable to his creditors under a margin call, to ensure the value of their security is maintained.

That could prove the tipping point for Musk finally stepping away from Tesla, if only for the company’s sake, now that he has arguably become its biggest liability. Of course, things could easily get worse if the fully self-driving taxi fails to materialise (again), or proves to be dangerous on the roads.

Arguably even more opaque is Musk’s latest venture, the newly enlarged xAI – his artificial intelligence/Grok company that recently merged with X. Unlike Tesla, xAI is a private company, so the public can’t buy shares and there’s no official market valuation. However, no one has seriously challenged Musk’s claims that xAI is valued at $80bn and X at $33bn (or $45bn minus $12bn debt).

Under Musk, a self-declared “free speech absolutist”, X has descended into a cesspit of hate speech, antisemitism, Islamophobia, racism, conspiracy theories and Trumpian propaganda. Its main value to Musk now appears to be as a training ground for Grok, helping it to learn and communicate – albeit in a rather idiosyncratic fashion.

The merger somewhat masks the fact that X is no longer worth the $44bn Musk paid for it during that famously hostile takeover three years ago. Experts suggest that, if it ever collapses, Musk would likely bear the brunt of that loss.

This pretty much leaves the dullest of his enterprises – the wryly named Boring Company, an infrastructure and tunnel construction firm aiming to tackle traffic congestion through underground transport – and the most valuable, exciting and romantic of all: SpaceX.

While SpaceX is wholly private, recent trading reports suggest it’s worth around $350bn. Musk is said to own 42 per cent – around $140bn – and revenues have increased fivefold in a few years. It barely turns a profit, but its value lies in its vast potential. With the growing Starlink satellite network and the unique reusability of its spacecraft, SpaceX has revolutionised space economics – with unknowable consequences.

Any wild estimate of future returns can be conjured from the possibility of establishing a sustainable and economically viable settlement on Mars – albeit with Musk installed as a kind of Ming the Merciless.

More than Tesla or his role in Doge, it is SpaceX where Musk’s focus truly lies. While the dream of space travel and Martian colonisation grabs the headlines, the real power of SpaceX lies in Starlink. Musk is currently the only individual capable of connecting every human on Earth, no matter how remote, to one another.

Starlink entered the public spotlight when Musk decided how and when it could be used in the Ukraine war, allowing Kyiv limited defensive access. Despite his public scorn for Zelensky, Musk may have helped prevent the country from falling to Russian forces at the start of the conflict.

But even with SpaceX and Starlink, Musk’s political profile has been bad for business, with contracts either cancelled or under threat – notably in Canada and Poland. Few now want to be associated with a man accused of making Nazi-like salutes and erratic and offensive behaviour. Musk’s future clearly isn’t in politics. He seems to have found it too difficult to juggle political posturing with managing his many companies – not to mention the reputational damage caused by his bromance with Trump.

The truth is, Musk seems driven by two increasingly incompatible forces. The first is his deep loathing of the “woke mind virus”, which he blames for his estrangement from his transgender daughter, Vivian Jenna Wilson. In an interview last year, Musk remarked that she was figuratively “dead” to him and claimed he’d been “tricked” into approving gender-affirming medical treatment when she was 16. That personal trauma appears to have fuelled his alliance with the populist right, and his antagonistic attitude towards “free speech”.

The second driving force is his almost childlike infatuation with science fiction. He clearly watched too much Star Trek as a child and devoured one too many pulp sci-fi novels, but his intelligence and dedication to his mission – however misguided – have certainly positioned him to be the first human to set foot on Mars.

There’s much about Musk that resembles Mr Spock’s cool, dispassionate logic, taking things to their ultimate conclusion regardless of the consequences. His emotional outbursts and tasteless jokes have meant he’s never been particularly likeable – but his role in the Trump administration has added an extra bitter taste to that perception.

It remains to be seen whether this will be his downfall – turning him into the main obstacle to securing the financial resources required to fulfil his wildest ambitions. Musk, rich and powerful as he is, now faces a decision: life on Earth – or life on Mars?