For Musk, there is good news recently, and bad news.

The good news is that the early beta of Grok 3.5 will be released to SuperGrok subscribers next week, and Musk said on social platforms that it is the first AI to accurately answer questions about rocket engines or electrochemical technology, "can reason from first principles and draw answers that don't exist on the Internet at all."

Bad news is a bit troublesome. On Monday, the U.S. Senate Democratic Investigation Panel released a report saying that Musk may evade potential fines and penalties over $2 billion by exerting influence on the federal government. The 43-page report, written by Democrats, who leads the Senate Permanent Subcommittee of Investigation, said Musk and his company face at least 65 “actual or potential” regulatory or enforcement actions from 11 federal agencies as of the day of Trump’s inauguration, 40 of which could result in potential fines of at least $2.37 billion.

"Musk launched a chainsaw strike against the federal government, apparently ignoring the law and those who rely on projects and institutions he unbridled to destroy. The link between many of Musk's decisions seems to be to benefit himself, avoiding the obstacles he believes are blocking his interests."

According to the report, Musk cut federal agencies and staff "chainsaw" to "evade supervision, undermine investigations, and make the lawsuit disappear at any time he chooses, in accordance with his conditions and orders."

2025 can be called Tesla's nightmare, with sales declines, stock prices plummeting, costs soaring, production interruptions... Moreover, under the double critical hit of Musk's outrageous remarks and the Trump administration's unreasonable tariff policies, Tesla has become a target for many countries and regions around the world to express dissatisfaction with the United States and Trump. The "boycott of Tesla" movement has been one after another, and the company's reputation is almost on the verge of collapse.

In this "American Hundred Days Reform", Musk himself not only shrank by $150 billion, but also became a thorn in the eyes of federal employees, Democrats and supporters. Even at Tesla's financial report meeting on April 22 local time, Musk announced that he would shift his work focus from politics to business from May, but obviously, Democrats are not prepared to let Musk go easily.

Musk, who can deal with Rockets and AI, cannot deal with politics. After all, compared to the causes of AI's "illusion", Washington's politics is much more complicated.

01

On April 23, local time, Tesla delivered a disaster-prone first-quarter 2025 financial report.

In this quarter, the company's revenue was US$19.335 billion, a year-on-year decrease of 9.2%; operating profit was US$399 million, a year-on-year decrease of 66%; net profit was US$409 million, a year-on-year decrease of 71%.

The company's most core automotive business performed seriously below market expectations. During the reporting period, Tesla's global production volume was 362,600 vehicles, a year-on-year decline of 13%; global delivery volume was 336,700 vehicles, the lowest quarterly delivery volume in three years, a year-on-year decline of 13%.

Tesla attributed the main reason for the decline in production to the fact that all four vehicle factories are upgrading Model Y models, and emphasized that the new model is expected to start production in the first half of 2025, and is expected to achieve a production growth of more than 60% in 2025 compared with 2024.

At the call after the financial report was released, Musk was quite annoyed by the public's bad voice, emphasizing that some media were deliberately setting the rhythm. "Tesla has experienced ups and downs over the years and has faced life and death tests several times. The current situation is far from reaching a stake." He said that Tesla's current decline is more affected by the macro economy. The decline in sales this quarter is because consumers are waiting for the revised Model Y to be launched, and the stock will be released in the future. “Once the autonomous driving capabilities are fully rolled out, no company can compete with Tesla.”

Paradoxically, Tesla's outlook on performance prospects shows a pessimistic attitude, emphasizing the difficulty in accurately measuring the impact of changes in global trade policies on automobiles, energy supply chains, Tesla's cost structure, and demand for durable consumer goods and related services.

As a special adviser to the Trump administration, although Musk has caused overwhelming resentment from federal employees at the U.S. Department of Efficiency (DOGE), it did not hurt Tesla's foundation. However, Trump's tariff policy was steadily stabbed Musk.

Tariff policies have seriously affected Tesla's production and sales.

According to data from the European Automobile Manufacturers Association, Tesla's new car registration volume in the EU market fell 45% year-on-year to only 36,000 vehicles. Plans for exporting Tesla driverless taxis and electric truck parts to the United States have also been suspended due to excessive tariffs.

"Musk is Tesla, Tesla is Musk", one prospers and one loses.

02

If the worst result can be digested in advance, even the smallest positive effects can trigger a rebound.

After releasing a disappointing first-quarter financial report, Tesla's stock price rose instead of falling and continued to rise sharply. Musk seemed quite excited about this. He reposted several tweets on his social account that supported Tesla's performance and praised his influence.

There is no doubt that Musk is Tesla's "soul character". In recent years, the overall environment has become increasingly complex. Most Silicon Valley giants are weakening their "founder effect" and gradually fading out of their daily operations, leaving the company to professional managers to manage. But Musk has done the opposite and has been strengthening his importance to Tesla.

As Tesla's largest individual shareholder and CEO, the company's interests and Musk's personal interests are not necessarily consistent. If Tesla cannot take the path it wants, Musk doesn't mind letting Tesla bear more losses.

In early 2024, Musk publicly shouted on social platforms that if he did not have 25% of the voting rights, he would rather build products outside of Tesla. Faced with netizens' confusion, Musk replied directly: "The shares held by Fidelity Fund are similar to mine, why don't they come to work?"

A few years ago, Tesla's board of directors had thought about finding someone else to replace Musk. However, according to people familiar with the matter, the board of directors "can't find a suitable candidate."

For a long time, Zachar Kirkhorn, born in 1985 and joined Tesla in the 2008 crisis, was regarded as the most promising successor of Tesla. He was gentle in his words and was considered an effective balance of Musk's emotional instability and long-term management of the company's daily operations. In May 2023, there was a rumor among the people that Musk was looking for a successor, but two months later, Kirk Horn suddenly announced his resignation without warning.

In addition, Drew Baglino, senior vice president of powertrain and energy business, and Zhu Xiaotong, head of China, were both regarded as potential successors. However, the former announced his resignation last year and the latter was transferred back to China from the US headquarters.

In fact, after Musk intervened in the US election in a large way, Democratic lawmaker Elizabeth Warren wrote a letter to Tesla's board of directors, questioning that the board of directors condoned Musk's "public use of private goods" and failed to fulfill its fiduciary responsibility to Tesla shareholders.

Warren listed a number of facts, including but not limited to: Tesla itself is an artificial intelligence company, and Musk also established an artificial intelligence startup xAI; Musk instigated Tesla shareholders to agree to invest $5 billion in xAI; Musk allocated a batch of Nvidia AI chips originally reserved for Tesla to X; Tesla sent employees to xAI.

Of course, Tesla did not respond to Warren's doubts, while Musk continued to mock Warren as a Senate "Karen" (mean white woman).

According to current regulations, Musk can work for Trump for only 130 days, and this term is expected to end at the end of May. But in fact, as long as Trump wants, he can renew Musk unlimitedly until the end of his term. However, because Musk promised to reduce his time at the financial report meeting, and the media exposed head-on conflicts between Musk and senior Trump administration officials one after another, it is generally believed that Musk will leave office after his expiration.

If market feedback really emerges from the "high-low-high" trend, that is, Tesla's stock price reached its recent high after Musk helped Trump win the election, slipped into the bottom after Musk invested his time in the government's efficiency ministry, and rebounded heavily after Musk returned. This may be the result Musk wants to see most, and further strengthened Tesla's performance to the market depends on his personal impression.

During Tesla's turbulent period, Musk was making a series of plans for other companies under his jurisdiction.

In March, xAI acquired X in an all-stock transaction. It is revealed that xAI is negotiating to raise $20 billion in new funding, the second largest startup funding ever. If successful, xAI's valuation is expected to exceed $120 billion. Musk knows that as one of the few manufacturing giants cultivated by the United States in the past twenty years, Tesla has more room for protection than most of its own industries, and temporary turmoil will not hurt the root cause.

Since the market has proved with facts that the company cannot cut with him, then Tesla must be led by him.

03

Tesla is waiting for Musk to "return", while the White House is making a break with Musk. According to Republicans, the foreign aid should be avoided from turning into uncertainty in the 2026 midterm elections.

Although they both want to promote the world to "right" and reduce federal debt, Musk and Trump are not like-minded in many aspects. Their cooperation is largely based on dissatisfaction with Democratic policies, rather than a comprehensive conceptual fit. Once the common "enemy" is temporarily gone, the hidden contradictions will be put on the surface.

"I don't need Elon to do anything, I just happen to like him." In April, Trump explained the loose "alliance" relationship between the two in a relaxed tone.

In addition to publicly expressing his disapproval of tariff policies, Musk also expressed objections to Trump's cuts in scientific research funds, especially the NASA budget. As we all know, SpaceX's rise is inseparable from the real money support given by NASA's large orders. Cutting NASA's funds will undoubtedly directly cut off SpaceX's funding source.

In addition, Trump's close cooperation with Open AI CEO Ultraman also annoyed Musk. Some analysts believe that Musk has also felt the crisis by significantly increasing his investment in xAI this year without clear results. Compared to being conservative, he is more willing to choose to be aggressive.

Previously, all parties hoped that Musk could serve as an "important bridge" for Sino-US trade relations exchanges. This was not only because he had important mutual cooperation value, but also because compared with Trump, Musk was a more sensible and good at judging the situation.

However, as the policies introduced by the Trump administration become more and more beyond conventional perception, this idea may never be realized. All Musk can do is to safeguard his own interests.

At the financial report meeting, Musk revealed that Tesla is starting to launch the US lithium iron phosphate battery production equipment to try to get rid of its dependence on China. At the same time, he also admitted that the production of "Outtimus Prime" robots has been affected by China's export controls on rare earths, and it is difficult to achieve the plan to mass produce 5,000 units within the year. The company is actively seeking to obtain export licenses.

"In my opinion, no company can match Tesla in the field of humanoid robots. On this track, from second to tenth place may all be Chinese companies, but I am confident that the number one will be Tesla." Musk also strongly praised China's drone manufacturing industry, saying that there is a clear gap in strength between China and the United States, but he believes that China's ability to be self-sufficient in the economy is also shocking.

Musk stressed that he will continue to support free trade and advocate lowering tariffs, but the final decision depends on Trump. Obviously, he is picking himself out of the current chaos and spending more time and energy to revive his tech empire.

Tesla's "avalanche" makes all parties want to watch Musk's jokes, but Musk is as smart as hell, but he will not give outsiders such opportunities easily. But Washington's "quagmire" will not allow him to escape easily.