Elon Musk’s business empire is experiencing a significant downturn. In just six weeks, Tesla’s shares have plummeted by 40%, wiping out the gains made after the 2024 election. This reversal reveals Mr. Musk’s reliance on his fanbase’s inflated expectations for financial success.
Musk’s approach to building businesses has been criticized as overly reliant on investors’ enthusiasm and hype. His empire is built on a “financial cult,” where legions of fans provide immunity from criticism and enable him to pursue ambitious ventures. However, this approach is unsustainable, and cracks are starting to show in his various business ventures.
Tesla’s automotive revenues declined 8% in the fourth quarter, and profit for 2024 dropped sharply. The company is increasingly relying on price cuts, which can boost short-term sales but damage long-term value. Musk has also been trying to spin Tesla as an AI company to further nourish the investor cult.
Musk’s other ventures, such as Solar City and The Boring Company, have struggled to turn a profit. Neuralink’s brain implant company is also facing significant challenges. Meanwhile, X (formerly Twitter) is struggling financially and culturally.
The article suggests that Musk shares commonalities with former US President Donald Trump, who built his fortune on timing credit markets and capitalizing on debt contracts. While both men are skilled at handling investors, their reliance on hype and fanbase enthusiasm can ultimately lead to financial downfall.
As the market continues to decline, it may be Mr. Musk’s undoing. The recent weakness in Tesla shares is a sign that this dynamic may be fading. Higher inflation from misguided policies and fiscal mismanagement could lead to higher interest rates, which would undo the stock market.
The article concludes that the battleground over US politics will soon shift to financial markets, where investors and analysts will play a crucial role in determining the fate of Mr. Musk’s empire.
Source: https://www.nytimes.com/2025/03/09/opinion/musk-tesla-sales-stock-price.html