This week in Trumponomics: Shilling for Tesla

President Trump is now a car salesman. His commerce secretary is one of his sales associates.

They represent just one model: Tesla (TSLA). It’s not yet clear if they know how to move the metal.

But Tesla CEO Elon Musk needs some help, and all the president’s men seem willing to oblige. So Tesla, a publicly owned company worth about as much as the annual defense budget, is morphing into a new kind of government-sponsored enterprise: the sagging company propped up by presidential endorsements.

It’s 100% unethical and possibly illegal, and it’s hard to imagine any other company with public shareholders becoming so blatantly political. But Musk and Trump are both mold-breakers, and they’re now trying to Trump-proof a once-popular brand damaged by the CEO’s own political extremism.

Tesla was on a roll after Trump won the presidential election last November. Musk was Trump’s biggest financial backer during the campaign and his new proximity to power seemed to bode well for the electric-vehicle trendsetter. Tesla’s already stratospheric share price rose by 91% between Election Day and Dec. 17.

By then, Musk was already getting started in his new role as the head of the Department of Government Efficiency (DOGE). At the beginning, DOGE looked like many other do-little commissions that would study ways to make the bureaucracy more productive and issue recommendations in a year or two. Pretty harmless.

But do-little isn’t Musk’s style, and within a few weeks of Trump’s inauguration, it was clear that DOGE was a do-much commission that essentially declared war on the whole government apparatus and many of its 3 million workers. DOGE began dismantling out-of-favor agencies, firing employees, and canceling federal contracts. Musk began fighting turf battles with Trump’s own Cabinet secretaries and trashing judges who blocked some of DOGE’s most brazen power grabs in court.

Musk has many talents, and one of his newest is the ability to make enemies. The multibillionaire has enraged Democrats and liberals, who were once the biggest fans of Tesla’s pollution-free cars. That has brought an identity crisis for the trailblazing EV maker, whose first big consumer base was California do-gooders. Musk’s politics are now in direct opposition to Tesla’s own consumer base, with stark and troubling consequences for the company.

Many potential EV buyers in the United States and Europe are boycotting Tesla at a time when its first-mover advantage is basically gone and there are many worthy competitors. Prices of used Teslas are plummeting. Protesters are agitating at Tesla dealerships, and vandals are setting some of them on fire. The stock has plunged nearly 50% from its Dec. 17 peak, with all post-election gains gone. Some Tesla shareholders are telling Musk to ditch DOGE and return to Tesla or find another CEO to run the company.

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At close: March 21 at 4:00:01 PM EDT

So, Trump turned the White House lawn into a pop-up Telsa showroom on March 11, cooing over Musk’s vehicles in front of the TV cameras and promising to buy one. Commerce Secretary Howard Lutnick, who ran a prominent investing firm before joining Trump’s Cabinet, became a fellow Tesla booster, telling Fox News viewers on March 19 that they should buy the stock. Attorney General Pam Bondi played her part too. She didn’t opine on the stock or the cars, but she described Tesla vandals as “domestic terrorists” and suggested her department would make an extra effort to find and prosecute them.

President Trump and Tesla CEO Elon Musk get into a Model S while looking at various models of Teslas on the South Lawn at the White House on March 11. (Jabin Botsford/The Washington Post via Getty Images) · The Washington Post via Getty Images

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All that federal firepower behind Musk’s car company must have supercharged its prospects, right? Well, no. The stock fell the day after Lutnick pimped it. Good-government groups charged Lutnick with violating longstanding ethics rules prohibiting public officials from promoting commercial products. On March 21, Musk himself asked Tesla employees to hold on to their stock, following reports that insiders and friends of Musk were dumping their shares and cashing in before the damage got any worse.

For most of the past 25 years, Musk has been an incredible creator of value, with a prominent role not just in the birth of Tesla, but also Paypal, SolarCity, SpaceX, and other companies. In Musk’s current, more nihilistic phase, however, he’s been a destroyer of value. He bought Twitter in 2022 for $44 billion, then hacked it to bits, DOGE-style, until it was worth only around $14 billion. Tesla had been a remarkable growth story, with its market value hitting $1.54 trillion last December. That’s now down to about $760 billion. Musk’s own net worth has dropped from $486 billion to $311 billion during those same three months, according to Bloomberg.

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At close: March 21 at 4:00:01 PM EDT

Tesla bulls and bears are now debating whether the EV pioneer can regain its prior altitude. The Trump endorsements won’t be the thing to do it. They reek of desperation and rest on the hilarious premise that Trump supporters will rush to buy Teslas, filling the void left by greens fleeing the brand. Trump has spent the past decade calling global warming a hoax while bashing and belittling EVs. So it must feel like whiplash for Trump acolytes to hear the world’s biggest fossil fuel booster now promoting cars fueled from a socket.

Musk could probably stem some of the damage if he relinquished his DOGE role and stopped trashing everybody who finds him fanatical. There’s no sign of that happening, though. Musk, who says he used to vote mostly for Democrats, seems to be on a path of political radicalization that led him first toward libertarian views and now toward authoritarian ones. Plenty of CEOs have political views, but it’s hard to think of one grasping for power so aggressively that he’s willing to sacrifice a trillion-dollar company that made him the world’s richest man.

Trump could go further toward helping his political ally, of course. He could direct more federal contracts Tesla’s way, give it cushy regulatory treatment, or use federal muscle to intervene against its competitors. But nobody needs to buy a Tesla, and car recommendations from politicians are a sure sign that something’s fishy under the hood.