The Department of Government Efficiency (DOGE), led by new chief Elon Musk, has just dropped a big, hot, truth bomb. As of March 24, they say they’ve saved $140 billion by cutting federal spending. This initiative, part of the second Trump administration, aims to streamline government expenses through significant cuts. Their push has led to widespread protests and civil unrest. Tesla has not been immune, experiencing a shocking 36% drop in stock price over just the first quarter of this year.
DOGE, in accordance with Musk’s vision, has proposed cutting $1 trillion in federal spending—drastically—in time for next May. Even taking all the above savings into account, these cuts amount to under one-third of Tesla’s stock market valuation loss over the same period. The department’s website reported the $140 billion in reductions, yet many of Musk’s allegations regarding waste, fraud, and abuse in the federal budget have been criticized as misleading or false.
A recent series of deep spending cuts have prompted unprecedented protests and boycotts. They’ve gone so far as to inspire lynch mobs attacking Tesla showrooms and vehicles across the world. These self-inflicted wounds have cast a long shadow over Tesla’s stock, tightening enormous shackles around the electric automaker. Moreover, DOGE’s initiatives have led to a steep decline in new vehicle sales, adding to Tesla’s challenges.
Elon Musk is sanguine about whatever chaos Tesla is experiencing now.
“Long term, I think Tesla stock is going to do fine.” – Elon Musk
Given the birth pains Tesla is experiencing, that pressure is only increasing for Tesla to execute on Musk’s lofty robotaxi promises with these significant financial pressures. DOGE’s efforts to starve the government of spending unwittingly put Tesla in a dangerous position.
DOGE and Tesla’s bumpy ride The department’s aggressive approach has sparked huge pushback, which has created a sticky web for DOGE and Tesla. Economic – As the most visible impact represents, DOGE’s dogged efforts to disrupt market forces and PR perceptions are a constant reminder of their need and peril.
“This is a very expensive job is what I’m saying.” – Elon Musk