Elon Musk has a Nazi problem. Since he bought Twitter and rebranded it X, he has allowed right-wing extremists, hate speech, anti-Semitism and Islamophobia to run rampant on it.
Now Musk — after deliberately doing a Hitler salute twice after President Donald Trump’s inauguration — is the Nazi. At least in the minds of those leading a backlash against his various companies, especially Tesla, whose product has become known as “Swastikars” in online memes.
Musk has been running the Department of Government Efficiency — whose acronym Doge is pronounced “doggy” by the great tech journalist Kara Swisher — and has taken a “chainsaw for bureaucracy” to the US federal government. After losing hundreds of thousands of government workers through firing or forced retrenchments, several major US agencies have been shut completely or denuded of any real power.
Apart from hiring people who would never pass any of the US government’s vetting, Doge’s numbers are highly suspect. For instance, it claimed on its “wall of receipts” that it had cancelled an $8bn contract, only for fact-checkers to find it was really $8m.
In San Francisco, home of the “tech bros”, a Tesla Cybertruck was spray-painted with a swastika — a theme that has been repeated worldwide. Some Tesla owners have put stickers on their vehicles saying “I bought this before Elon went crazy”, while others have sold their cars at a loss.
Tesla stores have become regular sites of protests, while many dealerships appear to have removed the actual cars after several instances of Molotov cocktails being thrown over fences, causing millions of dollars in damage.
That can’t be good for any brand. But this brand inferno is just one of Tesla’s problems, as it also faces increasing pressure from Chinese electric vehicles (EVs).
Tesla fortunes have declined steeply this year, even after Trump held what looked a Tesla marketing event on the White House lawn. He was photographed holding notes that read like a Tesla infomercial.
Tesla sales in 25 countries dropped 44% on average in February, according to researchers at Jato Dynamics. Sales in Germany alone plunged 76% after Musk vocally backed the far-right AfD party and caused huge controversy in a country still grappling with its Nazi history.
Overall Tesla sold 13% fewer cars in the first three months of the year, it reported. “We struggle to think of anything analogous in the history of the automotive industry, in which a brand has lost so much value so quickly,” said JPMorgan analyst Ryan Brinkman in a widely quoted March note to investors.
Tesla’s problem in the US is that Musk donated $288m to Trump and other Republicans last year, clearly alienating the most left-leaning buyers of electric vehicles. A good place to see the real damage is Norway, which is considered the world’s most advanced EV market. Last year Tesla had half of Norway’s market. In January and February, it fell to 9% — behind Volkswagen and Toyota. “Norway is always a good place to look into the future,” Will Roberts, an analyst who tracks EVs at research firm Rho Motion, told the New York Times.
The Tesla share has lost half of its value since it peaked in December, wiping more than $100bn off Musk’s personal value. Forbes said he had lost $121bn in early March. “This quarter was an example of the damage Musk is causing Tesla,” said Wedbush analyst Dan Ives. “The more political he gets with Doge the more the brand suffers … there is no debate.”
Apart from Musk’s increasingly political and destructive behaviour, analysts politely point to model refreshes for a drop in Telsa sales. But nobody wants to drive a car linked to someone whose actions are increasingly right-wing and racist, makes Nazi salutes at public events, has overseen nearly 250,000 US federal workers losing their jobs, and whole agencies, like the excellent USAID, being “fed into the woodchipper”, in Musk’s own words.
Many of those agencies he has ransacked were investigating Musk’s businesses, including USAID. Conflict of interest issues abound, but are not ventilated or resolved. Meanwhile, in another of his weird corporate tricks, Musk has sold X (the once thriving social network known as Twitter) to his AI start up, xAI. The deal was worth $33bn without its debt, but giving it a $45bn valuation, $1bn less than when Musk bought it.
“Elon Musk is opportunistically using the very high valuation he has for his xAI business in order to make his investors in Twitter whole,” Gil Luria, an analyst at DA Davidson, told Forbes. “Nobody benefits more from the merger than Musk himself,” he pointed out, calling it a “$33bn windfall for Elon Musk”.
With his net worth estimated at $342bn for the Forbes annual World’s Billionaires list, his estimated 74% stake in X was worth $7bn while his estimated 53% stake in xAI was valued at $26.3bn. His estimated 59% stake in the new xAI Holdings is now worth $66.4bn. “That’s double the combined value of his stakes prior to the merger. His net worth is now $374bn,” wrote Forbes. The AI firm is now valued at $80bn, up from $50bn last November.
Meanwhile, Politco reports that Musk may have to stand down as a special government employee because such workers are only allowed to be employed for 130 days. But he has already done unending damage to his reputation as an innovative thinker and a business entrepreneur. The Nazi salute and his “Doge” blitzkrieg will be his enduring legacy.
History will not be kind to Musk, whose action at USAID alone, and the knock-on effects for Africa, could lead to countless avoidable deaths. At one of the 200 or so protests outside Tesla showrooms last week one banner read: “Burn your swastikar before it burns you”.
• Shapshak is editor-in-chief of Stuff.co.za.
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