If Elon Musk is helping President Trump dismantle the federal government so he can add even more billions to his personal fortune, he’s doing a lousy job of it.
As head of the “DOGE” efficiency commission, the Tesla (TSLA) CEO has become Trump’s top consigliere and one of the most powerful unelected officials in American history. Musk’s team is eviscerating select government agencies, firing thousands of federal bureaucrats, undoing billions of dollars in spending approved by Congress — and claiming new powers for the executive branch. Trump has given him so much authority that “President Musk” is a recurring theme on social media.
Musks’s many critics, including the whole Democratic Party, claim the world’s richest man is merely lining his own pockets. One theory is that Musk is helping Trump cut billions of dollars worth of government services to help finance upcoming tax cuts that will mostly benefit rich people like him. Another is that Musk wants control of the government so he can channel fat federal contracts to his own companies.
“Elon Musk is planning to pay for his tax cut with your healthcare,” Sen. Bernie Sanders and other Musk bashers insist.
Musk may very well have financial motives, but so far, his service as a Trump henchman has left him less rich, not more. A big chunk of Musk’s wealth is his 12.8% stake in Tesla, which was worth about $175 billion when Trump signed DOGE into existence on Jan. 20. The share price since then has dropped 29%, shaving the value of Musk’s stake to $123 billion.
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Musk’s total net worth has fallen by a lot more.
Bloomberg estimates that Musk’s net worth peaked at $486 billion in late December and is down to $351 billion now, for a $135 billion decline. Musk’s total net wealth is imprecise because more than half of it is equity stakes in privately owned firms such as rocket company SpaceX, social media site X, and artificial intelligence startup xAI, which don’t have public valuations. Musk also lost a lawsuit last December over compensation incentives at Tesla that would have been worth more than $50 billion.
Tesla remains the flagship of Musk’s business empire, and while Musk’s role with Trump isn’t behind the whole decline in the company’s value in recent weeks, it does represent a significant risk for the automaker.
Musk’s new identity as a MAGA warrior has clearly rankled some Tesla owners and potential buyers, especially since Tesla’s emission-free electric cars typically appeal to environmentalists who tend to be more liberal.
There are now anti-DOGE protests at Tesla stores.
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Some Tesla owners display bumper stickers saying, “I bought it before Elon went nuts.” So far this year, Tesla sales have dropped sharply in Europe, Tesla’s third-biggest market, after Musk lobbied for a far-right political party in Germany. In the UK, an activist group called “Everybody Hates Elon” is hanging posters of Musk giving what looks like a fascist salute atop a Tesla “Swasticar.” In China, Tesla’s second-biggest market after the United States, the company could be targeted for retaliation as Trump ratchets up tariffs on Chinese imports.
Tesla shareholders are starting to troll Musk with social media posts asking him to list five bullet points explaining what he has done for them lately, a riff on Musk’s emails to federal employees asking them to justify their jobs. Tesla insiders are reportedly raising alarms about Musk’s activities on behalf of Trump damaging the company.
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If Musk were merely trying to enrich himself, he’d be more effective lobbying Trump quietly for policies likely to benefit his companies, like a traditional fat cat, instead of inciting a backlash against his companies.
So why is Musk subjecting his most valuable company to friction aroused by his own personal political crusade? It’s not because of any tax cut Musk might benefit from.
Trump’s biggest economic priority is extending the individual income tax cuts he first signed into law in 2017, which expire at the end of this year. Extending those tax cuts would benefit most high earners — but wouldn’t do much for Musk. With most of his wealth in company equity, Musk, instead of living off a paycheck, most likely supports himself through loans that use his equity as collateral. The appeal of that sort of arrangement is that you don’t pay income tax on loans. So it makes no difference to Musk whether the top federal tax rate remains at the new rate of 37% or reverts to the old rate of 39.6%.
If Trump were to cut the tax on capital gains, that could benefit Musk whenever he sells shares in his companies. But Trump isn’t proposing a capital-gains tax cut. Musk’s companies would benefit if Trump cut the corporate income tax, as would Musk, indirectly. And Trump has proposed a lower tax rate for companies that produce domestically. But that’s a lower Trump priority, and even if Congress passed it, the benefit to Musk would hardly be worth the heat he’s bringing on Tesla.
Musk: when will he fixate on something else? (AP Photo/Susan Walsh) ·ASSOCIATED PRESS
It’s possible Musk is angling for an inside lane for his own companies, including SpaceX, when they’re competing for government contracts. But SpaceX already gets most of its revenue from contracts with NASA and the Defense Dept., and as a commercial space pioneer it doesn’t really need the boost. SpaceX’s valuation soared in 2024 while Joe Biden was president and Musk had no special sway with the government. Why mess with what’s working?
Artificial intelligence could be motivating Musk, and not because he’s asking Grok for business advice. Musk views AI as the “mother of all technologies,” as New York Magazine put it recently, and his DOGE work could further his interest in AI in at least two ways: One, Musk could be using DOGE as an experiment to see just how far he can go in a large organization to replace people with machines. And second, he may be setting himself up as the government’s de facto AI arbiter, given that AI policy is largely unformed. Musk’s tech bro David Sacks is already Trump’s “AI and crypto czar,” which means Sachs has the portfolio and Musk the muscle to build a federal AI regime fit to their liking.
As a business operator, Musk has also clashed with many of the regulatory agencies he’s now seeking to dismantle. He famously chafes at rules and regulations he thinks shouldn’t apply to him. Combine Musk’s disdain for other people’s rules, his belief in the power of technology over bureaucrats, and his manic impatience with process, and you might arrive at a sort of Unified Theory of Musk’s DOGE: a unique opportunity for the world’s most driven man to refashion everything he can possibly control in his own image.
Whether it will work is another question. As a “special government employee,” Musk is limited to 130 days of work per year, which, in theory, would at some point slow the breakneck pace of DOGE’s work. But Musk could simply lose interest as the initial thrill of dismembering his most hated agencies wears off and the grind of lawsuits and other challenges bogs down the work.
Musk gravitates to what interests him the most at any given moment, and as the DOGE work starts to slow he may fixate on a new AI problem or race to Tesla’s rescue or decide the SpaceX Mars mission needs to be sharpened. Or start another company. Musk could remain besties with Trump even if he wearies on DOGE, which is probably what his investors are hoping for.
He was once a special employee to them too.
Rick Newman is a senior columnist for Yahoo Finance. Follow him on Bluesky and X: @rickjnewman.
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