Tesla Is More Vulnerable Than You Think
How to cost Elon Musk $100 billion.
Elon Musk, an impossibly wealthy, drug-addled Nazi sympathizer, is making drastic, devastating, unaccountable cuts to our federal government. He is making decisions of great global consequence based on nothing but his own demonstrably ignorant ideas. He is materially harming millions of people around the world. He seems to be operating outside of the law. He appears to have nothing holding back his worst impulses. The Republican Party has opened the door for him, the Democratic Party believes itself to be unable to stand in his way, and there is no indication that the courts will be able to roll back the damage he has already done. It is up to us.
As a regular person, it can seem impossible to plan and execute actions that would have a serious impact on the richest guy in America. Protesting and waving signs and calling your representatives are all things that you should do, but I know that they can often leave people feeling like their effort has not produced any real effects. You marched against the war and the war still happened. You marched against DOGE and they still defunded a bunch of cancer trials. Is any of this actually getting through to the well-insulated oligarchs?
Today, I want to point out that: Yes. There are very straightforward ways that regular people can organize and exercise leverage on Elon Musk. I will discuss one way here that you, yourself, can get involved with. The wealthier that someone gets, the more points of vulnerability their fortunes have.
What is the source of Elon Musk’s power? His wealth. There are lots of smart tech guys and there are lots of company founders and CEOs and political donors and as a group they exercise a fair amount of political influence, but the reason why this man in particular is swanning around DC doing whatever the hell he wants is that he is worth more than anyone else, and he spent more than anyone else to help get Trump elected. The way to get Elon Musk to pay attention is to target his wealth. I don’t think that he will ever be “not rich,” at least not until the revolution comes, but it is completely possible to bring about enormous losses in his net worth.
Most of Musk’s wealth comes from his ownership of companies that have become very valuable. The two biggest are SpaceX and Tesla. He owns more than 40% of SpaceX, a company that was recently valued at $350 billion, meaning that Musk’s stake is worth about $147 billion. SpaceX is a privately held company, and it is not consumer-facing, meaning its revenue is harder for regular people to affect. We’ll set aside SpaceX for now.
The other main source of Musk’s wealth is his ownership of around 13% of Tesla. That company, as of today, is worth $1.08 trillion, meaning Musk’s stake is worth about $140 billion. He also has a large number of unexercised stock options in the company. Tesla is the biggest single contributor to his net worth. It is also a public company, and one that makes its money by selling products to consumers. To regular people. Which is to say, the biggest single piece of Elon Musk’s portfolio is directly exposed to organized economic action by regular people. If you want to cost Elon Musk tens of billions of dollars, Tesla is the way to do it.
What might that look like? First, it is important to know this about Tesla’s stock price: It is insanely high. Meaning that it is much, much higher than the economic fundamentals of the company would dictate. (Which is why it has long been one of the most shorted stocks, although that trade has mostly not paid off for those who have been betting on its price to collapse for years now.) Tesla’s price-to-earnings ratio is currently 166, meaning that its stock price is 166 times the value of its earnings per share. How high is that? Well, the average PE ratio of the top 500 companies in America right now is 30—and that is high, by historic standards. The second most valuable auto company after Tesla is Toyota, which has a PE ratio of 7. General Motors also has a PE ratio of 7. What if you compare Tesla, instead, to tech companies, which investors assign a premium to? Well, the PE ratio of Apple is 39; the PE ratio of Amazon is 39; the PE ratio of Google parent Alphabet is 23. What I am saying here is that, even by giving Tesla every benefit of the doubt, the company’s stock price is irrationally high. This is well known on Wall Street. Tesla’s stock price—and by extension, the largest part of Elon Musk’s net worth—is almost purely a product of investor sentiment. It is not based so much on the company’s financial performance as on a magical belief that Musk will make it the biggest automaker in the world.
Any company whose value is this dependent not on its balance sheet but instead on a shared popular narrative is unusually vulnerable to narrative shifts. Financial history is one long demonstration of the fact that investor sentiment changes. A lot. Speculators of the sort that make up Tesla’s investors generally are like scared fish, moving tightly with the rest of the crowd, ready to swerve off in an opposite direction the moment that trouble is detected. Dampening the positive sentiment around Tesla as a brand can have a huge impact on Tesla the stock. A fortune that is built on irrational shared beliefs that can be destroyed when rationality’s cold hand creeps in. Consider the fact that if Tesla were to retreat even to a PE ratio of 40—comparable to that of big tech companies, which themselves enjoy higher PE ratios than industrial companies—that would imply a decline in the company’s value of 3/4. It would go from being a trillion-dollar company to a $250 billion company, only a bit larger than Toyota. That would represent a loss of around $100 billion in wealth for Elon Musk.
There is already a nascent protest campaign against Tesla. Its hashtag is #TeslaTakedown. It has a website. There have already been protests at Tesla dealerships across the country, and many more are planned. You can join them. In order for Tesla to make money they must attract buyers. Potential buyers can easily be turned off by having to pass protesters calling them Nazis when they go to browse for a new car. There are plenty of other cars to buy that will not get them yelled at. These things are a genuine factor in the minds of consumers.
Furthermore, we have all seen the reports of Tesla cybertrucks being defaced with swastikas or other graffiti implying that such vehicles could only be owned by Nazis. Some cybertruck owners have told reporters that they no longer want to own cybertrucks after these incidents. I would never condone illegal vandalism as a protest tactic. But as a keen observer of social trends, I observe that these types of actions often spread and become more frequent when large numbers of people view them as effective ways to achieve a goal. If owners of cybertrucks—or other Tesla products—come to find that they are frequently being made the targets of graffiti implying that they are supporting Nazis, I predict that consumer enthusiasm for purchasing Tesla products will decline. Do you really want to worry about your car being vandalized every day due to the political actions of the person who started the company? Why not just buy a different car, and save yourself that worry?
Sure, people who share the political goals of Elon Musk and Donald Trump may continue to buy Teslas, as a way to signal their own politics. (I imagine such people already make up a significant portion of cybertruck owners). But remember: Tesla’s stock price is not a number that can be justified if Tesla’s products appeal to, at most, half of potential consumers. Tesla’s stock price can only be justified by explosive global growth in Tesla sales. If sales figures do not show that Tesla is continually getting more and more popular, its stock price cannot remain at its current elevated level, much less go even higher. Despite Tesla’s size, its stock behaves like a meme stock. And meme stocks always crash down to earth, because they do not have financial fundamentals holding them up. They only have fickle, fickle sentiment.
Tesla is not so much an auto company as a story. The story is, “Elon Musk is a genius and his genius will cause uninterrupted growth of this company, which will come to dominate the entire auto market.” If this story begins to seem less plausible, investor sentiment will get shakier. If Tesla finds itself the target of sustained protests, and if owning a Tesla begins to carry a negative social price, it is very likely that a large portion of consumers will conclude that buying a Tesla is not worth the hassle. That story of global dominance will therefore become increasingly questionable. High stock prices based on shaky sentiment are very fragile things.
I sketch all this out only to make the point that this is not anything that is out of the reach of ordinary people taking ordinary actions in line with their First Amendment rights. There are Tesla dealerships all over the country. The idea of making Elon Musk $100 billion poorer might sound like some grand dream. It is not. If you think of it only in terms of your own spending, it seems difficult: You may not buy a Tesla, but you’re only one person, and you don’t spend billions. But that is not the right way to think of it. The task is not to organize an explicit national boycott so much as it is to tarnish Tesla’s brand—by simply making clear to potential Tesla consumers that their purchase represents support for an odious political agenda. You, picketing a Tesla dealership in your town, can play a very real part in this goal. The rest is nothing more than the unfolding of the relentless math of Wall Street.
Unpopular things don’t make money.
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Related reading: Enough Wealth to Warp the Universe; Demonize The Rich; Cars Have Fucked Up This Country Bad. Another way to have a significant impact would be to unionize Tesla, which is a topic for another day.
You can learn more about getting involved in the Tesla Takedown campaign here. You can find a list of national protests planned for March 4 here. Want another good cause? American sign language interpreters are unionizing, and they are holding a week of action this week—you can find out how to support them right here.
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People started throwing paint on fur coats, and then fur coats became less popular because nobody likes having to constantly clean paint off their stuff.
I remember an old Jalopnik (maybe Gawker?) article from a decade ago that called this man a Bond villain when everyone else was swooning over him.
Add me to the growing list of former Tesla owners. After many months, the stars and math finally lined up for me two weeks ago and I was able to break even on my trade-in and went with a Mustang Mach E. (Yea yea, I know Ford's checkered history there too... 😬😅).
It's bad enough his actions take over most of the internet; I couldn't stomach the daily reminder of how toxic the CEO and brand are.
A couple of my friends went with Rivian, and others plan to offload their Teslas soon. Baby steps I guess ✊🏽.