Musk Returns to Tech Empire Amid Investor Concerns
Tesla, SpaceX Face Challenges After CEO’s Political Stint
After a months-long foray into Washington D.C. as head of the Department of Government Efficiency, Elon Musk has resumed direct control of his technology companies. His return comes as investors and employees alike demand answers about declining performance and a perceived leadership vacuum.
From Tech Titan to Political Role
Musk’s time in public service, serving as a close ally to President Donald Trump, involved significant budget cuts and deregulation, particularly impacting green energy initiatives. These actions alienated some of his original supporters and business partners. According to a recent report by the Environmental Defense Fund, federal funding for electric vehicle infrastructure decreased by 18% during Musk’s tenure at DOGE. Environmental Defense Fund
Tesla’s Sales Slump and Public Criticism
During Musk’s political involvement, Tesla experienced a notable downturn. As government incentives for electric vehicles faced threats and new tariffs were imposed, Tesla’s stock value fell approximately 14%, representing a loss of around $180 billion in market capitalization. Dealerships became focal points for protests, and employee morale suffered.
SpaceX Struggles with Leadership Absence
SpaceX, previously driven by Musk’s constant presence and vision, reportedly experienced declining morale in his absence. A former mechanic publicly expressed concern, stating: “Your presence used to drive a fire in the team… Please come back and walk the floor.”
Despite two Starship test launches, employee sentiment indicated diminished motivation.
Declining Engagement at Tesla
Musk reportedly made a brief visit to Tesla’s Palo Alto office before an earnings call, questioning the impact of Trump’s tariffs—policies announced months prior. Insiders revealed concerns about his reduced engagement, with some meetings attended remotely or missed entirely. A board member reportedly stepped in to address leadership gaps, while top engineers expressed waning confidence.
xAI and X: The Focus During Political Service
While Tesla and SpaceX faced challenges, Musk remained actively involved with xAI, his artificial intelligence company. He frequently promoted its chatbot, Grok, on X (formerly Twitter). In March 2025, Musk merged X and xAI, creating a tech entity valued at $113 billion, according to internal documents related to an upcoming tender offer.
Telegram Partnership and Conflicting Signals
Last month, Musk and Telegram founder Pavel Durov hinted at a partnership to bring Grok to Telegram’s billion-plus users. However, Musk later contradicted the announcement, stating: “No deal has been signed.”
This public reversal highlighted internal misalignment and reaffirmed Musk’s ultimate authority, even if communication remains unclear.
Demands for Leadership Beyond Symbolism
As Musk shared images from SpaceX’s control room and claimed to be sleeping on factory floors, employees and investors began requesting more than symbolic gestures. Both public posts and internal sources indicate a desire for Musk to actively lead strategy, boost morale, and navigate current economic pressures.
