Inside Elon Musk DOGE: Big Cuts, Big Money, Bigger Backlash

Elon Musk DOGE Impact: Government Downsizing and Tesla Struggles

In the first 100 days of President Trump’s second term, Elon Musk has accumulated significant influence, leading efforts to close agencies and workforce reduction. 

His aggressive leadership at the Efficiency Dept, highlighted by a powerful speech, has sparked lawsuits, worker backlash, and investor criticism. However, he still has strong backing from Republican voters and public support from Trump. Elon Musk DOGE (Department of Government Efficiency) initiative led to significant federal downsizing, including elimination of 11 agencies and claimed to save $600 million in taxes annually. 

Musk Rose in Power and Poured Money Into 2024 Election:

The Tesla CEO backed Trump right after his July 2024 assasination attempt. Their alliance was fueled by money. It is estimated that Elon has spent more than $250 million supporting Trump and other Republican candidates in the election. Mostly by his America PAC (Political Action Committee).

What is DOGE?

DOGE is a non government department, that was instituted by an act of Congress officially. 

It is an advisory body, instituted on January 20th 2025 by an executive order signed by Trump. Its mission relates to IT upgrades for enhanced efficiency. The staff of Elon Musk DOGE consists of many young people having technical background but no government experience. It's aiming to end “tyranny of the bureaucracy” and cut the national debt of the USA, which is $36tn.

Aftermath:

Since January 2025, Elon Musk DOGE has played a pivotal role in a 10% cut of the civilian workforce. Despite mass job cuts and eliminating agencies, overall government spending increased by 6%, Elon Musk DOGE has severely affected his business empire also. Musk's business gains significantly from federal programs. 

                                                                                                                Source: Cory Booker, X

Tesla makes billions annually by selling credits to automakers who don’t meet federal emission standards. Additionally, Tesla cars benefit from tax incentives for electric vehicles. However, Trump has pushed for reducing these subsidies for electric cars. Elon Musk DOGE controversies have heavily contributed to reputational and operational challenges that shook investors’ confidence.

As per the last week’s report, the sales of Tesla cars have dropped by 20% in the Q1 of 2024, if compared with the last year, the profits have crashed more than 70%. He has lost $113 billion since January in 2025. According to Bloomberg, his wealth graph has dropped by 25% since January 17, in the current year.  Huge loss, isn't it?

Elon Musk DOGE has raised concerns among the Tesla investors. Some worry Elon is too distracted by politics to focus on directing the company, while others fear his controversial image could damage Tesla’s brand. Over the past year its stock prices have dropped nearly 25% since early January. These setbacks have led some investors to call on Musk to distance himself from the Trump administration.

Result:

At the company’s alarming call, the CEO said “Starting next month, May, my time allocation to Department of Government Efficiency will drop significantly”. Pointing at the protests against Tesla, he added “the protests that you will see out there, they are very organised”.