On May 29th, Elon Musk officially stepped down from his role in the Trump administration’s Department of Government Efficiency (DOGE), concluding a 130-day tenure marked by controversy and unmet fiscal goals. His departure follows public criticism of a Republican-backed spending bill that, contrary to DOGE’s mission, significantly increases the federal deficit. This development underscores the complex interplay between political affiliations, corporate responsibilities, and the influence of high-profile individuals on emerging financial markets.
His resignation marks a pivotal moment in the ongoing scrutiny of his leadership and its impact on Tesla. While Musk’s departure from DOGE was intended to refocus attention on Tesla, it has done little to ease growing concerns among investors and the public about his commitment to the company’s core goals of innovation and sustainability. Instead of restoring confidence, the move has highlighted deeper issues within Tesla, as the company continues to struggle with declining sales and mounting reputational challenges. These concerns are compounded by perceptions that Musk’s attention is divided, raising questions about whether he remains fully dedicated to steering Tesla through a critical period of transformation. As a result, his leadership is now under intensified scrutiny, with stakeholders demanding clearer direction and renewed focus on the values that once defined Tesla’s pioneering identity.
Tesla Takedown as a Global Backlash Against Musk
The hashtag #TeslaTakedown trended widely on X (formerly Twitter) and other social media platforms in early 2025, marking a global protest movement targeting Tesla and its founder, Elon Musk. Activists across the United States, Canada, Europe, and Australia called for divestment from Tesla by urging individuals and institutions to sell off their vehicles and shares. The movement was sparked by a series of controversial decisions by Musk, most notably his decision to join the Department of Government Efficiency (DOGE), which critics say undermined public trust in Tesla’s independence.
Even before the protest gained global momentum, Tesla was already grappling with unstable corporate performance, particularly in the stock market. In the first quarter of 2025, Tesla ranked among the worst-performing stocks in the S&P 500, with shares losing over a third of their value. This significant decline was largely fueled by public backlash against Musk’s aggressive efficiency policies under DOGE, which disrupted Tesla’s operations. Meanwhile, Tesla’s electric vehicles have struggled to maintain market share amid a surge of Chinese EVs dominating Asian and European markets. This fierce competition has led to weakened demand, production slowdowns, and mass layoffs. The company is currently laying off more than 10% of its global workforce—its largest reduction in four years—underscoring declining sales and the ongoing failure to deliver an affordable EV in the face of a price war with Chinese rivals. In addition, Tesla reported a gross profit margin of just 17.6% in Q4, the lowest in over four years.
Sustainability is a myth to Musk.
The situation deteriorated further when the United States, under the Trump administration, withdrew from the Paris Agreement, casting fresh doubts on Musk’s environmental commitments, especially given his newly acquired role within the administration. Tesla has long branded itself as a green tech pioneer committed to zero-emission vehicles and the reduction of carbon emissions. The company’s stated goal is to operate fully carbon-neutral factories to help create a more sustainable future. However, this commitment was called into question in 2022 when Tesla was removed from the S&P 500 ESG Index. Established in 2019, the index evaluates companies based on their environmental, social, and governance (ESG) standards. Tesla’s removal prompted Musk to publicly denounce ESG as a scam, citing examples of tobacco companies receiving higher ESG ratings than Tesla, despite its focus on clean energy innovation. S&P justified the decision by pointing to allegations of racial discrimination and a failure to maintain a healthy workplace environment. In response, Tesla issued a statement reaffirming its commitment to equity and non-discrimination, after which it was eventually reinstated.
Tesla’s ESG Commitment and Consumer Trust
Musk’s dual role as both the head of multiple tech companies and a government bureaucrat places him in a difficult position, torn between saving his company and navigating political criticism. On one hand, Tesla’s poor ESG record with S&P has made Musk skeptical of ESG initiatives; on the other, public trust in Tesla’s electric vehicles, which are projected to play a key role in future sustainable innovation, is at risk. Without substantial reform, the divestment movement could continue to grow. The U.S. withdrawal from the Paris Agreement signals a loosening of domestic environmental policies, including the blocking of EV subsidies, increased fossil fuel production, and a backlash against Diversity, Equity, and Inclusion (DEI) initiatives. Following the U.S. withdrawal, many investors divested from their holdings, indicating a decline in ESG funds, with an estimated outflow of up to 6.1 billion US dollars in the first three months of 2025, after 4.3 billion US dollars had already been withdrawn in the last quarter of 2024.
The U.S. policy towards environmental issues directly contradicts Musk’s goals for Tesla as a leader in sustainable technology and creates serious challenges for the company in fulfilling ESG commitments. Trump’s open support for Musk amid the #TeslaTakedown controversy, even going so far as to call the protests a form of domestic terrorism, has only damaged Tesla’s reputation further. Trump also praised Musk’s budget-cutting measures, especially the termination of DEI-related contracts. This endorsement has triggered a decline in Tesla’s stock and raised investor concerns about Musk’s political entanglements with the Trump administration. Additionally, Tesla’s long history of overpromising and underdelivering, such as missing production targets or releasing products that differ sharply from initial announcements, has damaged its credibility and fueled accusations of greenwashing. Societal skepticism toward Tesla’s commitment to sustainable innovation continues to grow.
Blurred Lines Between Politics and Business
Elon Musk’s resignation from DOGE marks a crucial step toward repairing Tesla’s reputation, which had noticeably declined in early 2025. This move signals a renewed focus on Tesla’s core mission, including the return of customers who had grown skeptical of the company’s commitment to sustainable innovation. It underscores the difficult reality that balancing dual roles as a politician and a business leader is inherently vulnerable to conflicts of interest and that one must be prioritized to meet customer expectations effectively. Musk’s involvement with DOGE indicated that he placed political ambitions, particularly those aligned with Trump, above Tesla’s fundamental goals. Trump’s strong influence shaped policy decisions that reflected his controversial and dismissive approach to criticism, which conflicted with Tesla’s values and threatened the company’s commitment to sustainability.
Sustainable leadership is essential for building authentic commitments that resonate with the public, and the #TeslaTakedown movement serves as a clear wake-up call for Musk. Ultimately, only by drawing a clear line between business and politics can Tesla rebuild public trust, regain its competitive edge, and chart a sustainable path forward.