Musk 'May Cut Govt Waste For a Year', Tesla Shares Plunge

Tesla has suffered its worst sell-off in the US in five years, with the carmaker plunging by 15% on Monday.

The electric vehicle giant has seen seven weeks of losses – the most serious slump since its Nasdaq listing in 2010 – which began when CEO Elon Musk took up his cost-cutting role with the Trump Administration in Washington.

The company’s shares have lost nearly half their value since late last year and have led a wider slump in US tech equities.

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The dramatic sell-off followed an admission during an interview with Fox Business when Musk was asked how he is able to run his businesses while also overseeing a dramatic cull of Federal government workers.

His response: “With great difficulty,” and admitting that his government role meant “giving up your other stuff.”

Musk heads a range of companies that have encountered problems in recent weeks, with two rockets launched by SpaceX, his aerospace and defence company, exploding during test flights, plus problems such as outages and cyber attacks on his social network X.

Musk also admitted that he expected to continue in his role at the Department of Government Efficiency (DOGE) trying to eliminate an estimated half a trillion dollars worth of US government waste for another year – a second admission hardly likely to have delighted Tesla shareholders.

Later, he posted on X that “It will be fine long-term” – in regard to the drop in Tesla’s stock price.

Deficit reduction, brand destruction

The Tesla brand has taken a hammering from Musk’s often divisive political comments posted on X and the dramatic cost-cutting he has overseen for the Trump Administration.

Judging by his latest remarks to Fox, his goal is to reduce a deficit that is so big ($36.5 billion) that national interest payments total well over the $820-billion-plus the US is spending on defence this year.

“That was the wake-up call for me,” he said. “[The deficit] is growing over time and if we don’t do anything about this, there won’t be money for anything. We’ll just be servicing debt.”

But Musk’s interview with Larry Kudlow suggests he harbours enormous doubts about non-government organisations and whether their work is properly monitored. He also says bureaucrats often seek to thwart goals that their politically appointed leaders try to achieve.

“What we’re trying to do here is defeat a bureaucracy that has rule of the people,” he said.

With Trump’s backing, he has launched vigorous cuts to long-term aid programmes. Having the world’s richest man overseeing the end of billions of dollars in important relief projects for some of the world’s most needy people has shocked millions around the globe.

As a highly successful businessman often absorbed in profit and cost reduction strategies, the idea of overseeing an audit to slash US government costs – to counter what he alleges is a “massive amount of fraud” and enable a significant reduction of the national debt – seems to have been an important and irresistible challenge.

But while spearheading a dramatic and seemingly carefree decimation of government agencies such as USAID, he appears to have been oblivious to the PR damage he has done to his companies.

Indeed, Musk expressed some surprise that he had found himself in this position. “Frankly I can’t believe I’m here doing this, it’s kind of bizarre.”

“I mean, really, I just don’t want America to go bankrupt … I’m just here to make government more efficient, eliminate waste and fraud. And so far we’re making good progress, actually. Our savings at this point exceed $4 billion a day… unless we’re stopped we could get to a trillion dollars in savings.”

Trump backs Musk, set to buy a Tesla

President Trump stood by his Musk after the share plunge, saying “radical left lunatics” are “illegally and collusively” boycotting Tesla.

He said Tesla was one of the best automakers in the world and he would buy one on Tuesday.

“I’m going to buy a brand new Tesla tomorrow morning as a show of confidence and support for Elon Musk, a truly great American,” Trump wrote in a post on Truth Social early on Tuesday.

Doubts on EV rebate claim in Canada

Meanwhile, in Canada, Tesla has been accused of gaming the country’s EV rebate programme, according to a report by Carscoops.

The report said Tesla claimed to have sold over 8,600 cars in just three days at four stores before the rebate programme ended. “The surge in sales amounted to more than $43.1 million in rebates claimed by Tesla.”

That meant the company would have sold 30 cars an hour at each of its four stores – “essentially one car every minute, 24 hours a day…for three straight days. And yes, this includes hours when the stores were closed,” it said.

“This extraordinary surge in sales conveniently coincided with Canada’s impending end of its electric vehicle subsidies, and it led to Tesla filing for C$43.1 million ($30m) in rebates.”

Officials are sceptical, it said, because of a report that deliveries of Tesla vehicles plunged by 70% in December and January.

Little wonder that Tesla stores and cars have been set alight and vandalised, while reports stream in of buyers expressing profuse regret at purchasing his company’s cars, plus sacked workers stage protests outside his stores over DOGE job cuts.

Tesla sales in Europe sank by nearly half in January, while global sales of EVs continued to rise.

But despite his worth tumbling by $132 billion since the start of the year, his personal wealth was still estimated at about $330 billion yesterday, according to Forbes.