The Week in Musk: "Even my hat has a hat"

In this week’s Musk Watch roundup: Elon's parting lines, Tesla’s search for a new CEO, and blue state efforts to diminish Tesla.

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White House Senior Advisor, Tesla and SpaceX CEO Elon Musk attends a Cabinet meeting at the White House on April 30, 2025. (Photo by Andrew Harnik/Getty Images)

As Elon Musk prepares his partial withdrawal from the White House, the billionaire used a Cabinet meeting on Wednesday to snicker about his historically peculiar stint in Washington. "It is funny that we’ve got DOGE," he said, referring to the White House's Department of Government Efficiency initiative. "Doesn’t the absurdity of that seem, like, like, are we in a simulation here or what’s going on? But, like, it was a meme coin at one point. How did we get here?"

Musk spent much of the meeting trying on a pair of hats: A red one with Gulf of America printed across it and a black one inscribed with the DOGE acronym. He settled on wearing both simultaneously, placing the Gulf of America cap over the DOGE lid. President Trump complimented the look, saying only Musk could get away with "the double hat."

"As they say, I wear a lot of hats," Musk replied. "And as you can see, it's true. Even my hat has a hat."

After promising to use DOGE to cut federal spending by $2 trillion and then $1 trillion, Musk admitted his goal was less than complete. "In the grand scheme of things, I think we’ve been effective. Not as effective as I’d like. I think we could be more effective," he said after lamenting that being "attacked relentlessly is not super fun."

While DOGE has claimed $160 billion in savings, the real number is likely far less than that. The Musk Watch DOGE Tracker has recorded just $12.6 billion in verifiable savings. And government spending has increased during the Trump-Musk partnership, rising more than 6% since Inauguration Day, according to the Penn Wharton Budget Model.

Musk contended that DOGE could still reach its original goal if Republicans were so inclined. "How much pain is the Cabinet and the Congress willing to take?" he said. "It can be done, but it requires dealing with a lot of complaints."

As for the attacks Musk said he has faced, the decline in his popularity since he joined the White House appears to be a contributing factor. A new Washington Post-ABC News-Ipsos poll found that 57% of Americans disapprove of Musk's role in the Trump administration, up from 49% in February. Broader sentiment toward Musk has followed a similarly negative trend, with 58% of Americans viewing him unfavorably, according to a Reuters/Ipsos poll released this week.

Tesla board reportedly floated Musk replacement

On Wednesday, the Wall Street Journal reported that members of Tesla's board weighed replacing Musk as chief executive several weeks ago amid public and market backlash over Musk's role in the White House:

Board members reached out to several executive search firms to work on a formal process for finding Tesla’s next chief executive, according to people familiar with the discussions…

The board narrowed its focus to a major search firm, according to the people familiar with the discussions. The current status of the succession planning couldn’t be determined. It is also unclear if Musk, himself a Tesla board member, was aware of the effort, or if his pledge to spend more time at Tesla has affected succession planning. Musk didn’t respond to requests for comment.

Per the Journal, members of the board told Musk that he needed to dedicate more of his time to Tesla. They also advised him to convey his recommitment to the automaker in public, which he did during an after-earnings call last week. "Starting next month," said Musk, "I’ll be allocating far more of my time to Tesla."

In a statement released through Tesla's account on X, Tesla chairwoman Robyn Denholm called the Journal's reporting "absolutely false." She claimed that Tesla also contested the accuracy of the report before it was published.

"The CEO of Tesla is Elon Musk and the Board is highly confident in his ability to continue executing on the exciting growth plan ahead," Denholm said.

The Journal subsequently updated its piece with Denholm's statement but maintained that Tesla "didn’t provide a statement before publication."

On X, Musk lashed out at the paper in a series of posts, at times writing in all-capitalized letters. "It’s not that all @WSJ stories are fake, but they are almost all mean-spirited and deceptive," he complained.

The Journal also reported that Tesla's board "has been looking to add an independent director," a board member who would be unaffiliated with the company or its leadership. Denholm was handpicked by Musk, and most of Tesla's other board members had pre-existing personal or professional relationships with Musk.

New York Democrats look to unwind Tesla privileges

State Democratic lawmakers in New York are attempting to reverse some of the privileges they previously granted Tesla as the top "green" automaker in the U.S.

From the New York Times:

After President Trump’s victory last fall, and the polarizing work by the billionaire Elon Musk, Tesla’s chief executive, to lead the Department of Government Efficiency, [Senator Patricia] Fahy is no longer on Tesla’s side.

Ms. Fahy, a Democrat whose district includes Albany, and other state lawmakers are pushing to revoke a legislative waiver that has let Tesla directly operate five New York dealerships rather than sell cars through dealer franchises, as other carmakers must do…

In New York, Democratic legislators are calling for a comprehensive audit of a deal that gave Mr. Musk’s company nearly $1 billion in benefits to operate a plant near Buffalo under a $1-a-year lease. A bill to authorize the audit would give the state government a path to claw back the subsidies. Local and state officials also want state and city pension funds to divest any Tesla investments they have.

The anti-Tesla efforts in New York come as Democrats across the country find novel ways to target Musk's most valuable company. In Washington state, the legislature passed a bill over the weekend that would tax Tesla's booming sales of regulatory carbon credits.

Tesla's 'pre-tariff' warning and post-tariff edge

Earlier this week, the White House chastised Amazon for considering a change to its website that would show customers how Trump's tariffs contribute to an item's price tag. Amazon ultimately dropped the idea after the Trump administration called it "a hostile and political act." Curiously, Tesla has managed to incorporate tariff-induced price concerns on its website without drawing fire from the White House. "Explore pre-tariff priced inventory while supplies last," reads a banner on Tesla Canada's website.

All Teslas sold in Canada are made in factories in China and the US, so any tariff-related cost increases would rest squarely on the shoulders of Donald Trump.

According to analyst Dan Ives of Wedbush Securities, Trump's updated auto tariffs help "Tesla a lot" but leave the Big Three in Detroit (GM, Ford, and Stellantis) mired "in quicksand."

"While not completely unscathed," Ives said, "Tesla is in the best position to weather this storm vs. the Big 3 and other foreign automakers as it localized 85% to 90% of its supply chain in the US and will be exempt from many of these tariffs."

The analysis came after Trump issued a pair of executive orders on Tuesday meant to provide partial tariff relief for U.S. automakers. One of the executive orders, however, appears to help Tesla exclusively. The dictate states that U.S.-made cars constructed using 85% or more domestically sourced materials will be exempt from tariffs. But the only cars that meet those benchmarks are Tesla's Model 3 Performance, Model Y Long Range, and standard Model Y, according to the Kogod School's Made in America Auto Index.

Musk joined interview of Trump’s nominee for Air Force secretary

Musk was party to Trump’s December interview of Troy Meink, the president’s nominee to lead the Department of the Air Force. The disclosure was filed as part of Meink’s Senate nomination and first reported by Politico. Meink described Musk as having been "one of many people present" at the interview and implied that the SpaceX chief did not ask any questions. "I have no relationship with SpaceX or Mr. Musk outside of a professional relationship in the execution of my current duties," Meink added.

As Air Force secretary, Meink will oversee the Air Force and the Space Force, branches that have contracts with SpaceX worth billions of dollars, including for satellites and rocket launches. SpaceX would receive billions more if selected to lead the construction of Trump’s Golden Dome, a planned strategic missile defense program. The Air Force is also weighing the use of SpaceX rockets to ferry cargo to U.S. bases across the world.

Meink is currently the second-in-command at the National Reconnaissance Office, which has awarded SpaceX huge contracts to launch its constellation of spy satellites. Meink has built his reputation on encouraging the Pentagon to utilize commercial space firms for national security operations.

SpaceX loses effort to control South Texas beach; NASA nominee prioritizes moon landing over Mars; Musk aide forms 'Red Planet' companies

Lawmakers in the Texas House voted down legislation that would have granted SpaceX the authority to close down a public beach in South Texas to accommodate its launch cadence. The legislation, which passed the Texas Senate, was defeated by a single vote (seven nays, six yays) in the Texas House State Affairs Committee. However, the Texas House could vote on a revised version of the bill before the legislature adjourns its regular session on June 2, according to My San Antonio. Due to a Texas lawmaking quirk — its state legislature only convenes for regular sessions in odd-numbered years — SpaceX has a limited window to pass a revised version of the bill.

At NASA, Jared Isaacman, who Trump nominated to be the agency's administrator, told the Senate that he "would prioritize" the agency’s Artemis moon landing program over a potential Mars mission favored by Musk. But Isaacman added he hoped NASA could pursue a moon landing in tandem with a Martian mission.

A private astronaut who paid SpaceX an estimated $200 million to book one of its rockets, Isaacman has faced persistent questions throughout his nomination regarding his relationship with SpaceX. He has parried the criticism by insisting he does "not have a close personal relationship with Mr. Musk" and said he has terminated "future missions" he had scheduled with SpaceX. (SpaceX's Starlink is a customer of Isaacman's payment processing company Shift4, which also holds SpaceX stock. If confirmed, Isaacman has said he will step down from Shift4 but will retain his interest in the company.)

On the subject of Mars, one of Musk's top lieutenants, Jared Birchall, created three limited-liability companies earlier this year named Red Planet I, II, and III, according to the New York Times. The companies were registered under a Texas address used for other Musk ventures. It's unclear what Birchall (or Musk) plans to do with the companies. But reaching Mars is Musk's expressed raison d'être. The billionaire has said he plans to use his wealth to establish a Martian colony within the decade.

Europeans dump X; Wall Street moves Twitter debt; xAI's $20 billion funding round

Under the European Union’s landmark Digital Services Act, X was required to release figures on the size of its user base this week. The results were suboptimal. X has lost 11 million European users since August 2024, dropping from 105 million to roughly 95 million. France led the exodus, with 2.7 million users in the country leaving X, followed by Poland at 1.8 million and Germany at 1.3 million. Under the DSA, the EU is investigating X for failing to police illegal content on the platform.

On Wall Street, a group of top banks led by Morgan Stanley has managed to offload the last slug of debt they loaned to Musk for his $44 billion buyout of Twitter, now X. The final $1.2 billion in X debt held by Wall Street banks sold for 98 cents on the dollar on Monday, according to the Wall Street Journal. That marks a remarkable turnaround from last year, when prospective buyers were bidding just 60 cents on the dollar. Musk’s newfound influence in Washington and his recent decision to merge X with xAI helped make the debt far more attractive.

As for xAI, Bloomberg reported that the joint social media and artificial intelligence company is reaching out to investors as it looks to raise $20 billion in a new funding round. Provided that X can entice enough investors, the round would be the second-largest in the history of tech startups. (OpenAI, Musk’s arch rival in the industry, captured the top spot in March, when it closed a $40 billion funding round.)

Musk Minutes

On Wednesday, Musk said that DOGE should investigate the Federal Reserve. "Since at the end of the day, this is all taxpayer money, I think we certainly — we should definitely — look to see if indeed the Federal Reserve is spending two and a half billion dollars on their interior designer," he said. (Bloomberg)

Musk's allies at the Federal Aviation Administration reportedly made employees sign non-disclosure agreements related to the agency's planned overhaul of its communications system. The news comes two months after it was reported that Starlink is attempting to overtake a $2.4 billion communications contract the FAA signed with Verizon. (Rolling Stone)

The Justice Department has pressured FBI supervisors across the country to promote the bureau’s work online, leading regional FBI offices to share pictures of arrests and handcuffed suspects on X. FBI director Kash Patel, meanwhile, has used X to promote his celebrity lifestyle, sharing photos of himself posing with Wayne Gretzky and attending UFC events. (Wall Street Journal)

Musk has continued to stream videos of himself gaming on X but has opted to disable chat responses from the general public. The change came after Musk was bombarded with derogatory comments from fellow gamers during a gaming session he streamed last month. (Newsweek)

Amazon’s Project Kuiper, a firm that hopes to rival Starlink’s dominance in the non-terrestrial broadband industry, launched its first batch of 27 internet satellites on Monday. The satellites were launched aboard the United Launch Alliance’s Atlas V rocket. Project Kuiper plans to operate more than 1,600 satellites by the summer of 2026, though that goal appears unlikely amid launch and production delays. (CNN)

A report from the Wall Street Journal explores how members of Musk's inner circle have served as middlemen for those seeking access to shares of SpaceX, the world's most valuable private company, and xAI. The paper revealed that Antonio Gracias, a SpaceX board member and DOGE lieutenant, has offered investors $1 billion worth of SpaceX and xAI shares in a private sale. If completed, the sale would net Gracias and his firm millions in fees. (Wall Street Journal)

As part of its partnership with Starlink, T-Mobile has lowered the monthly price of its direct-to-cell service to $10 for all plans. That’s down from $15 for T-Mobile customers and $20 for customers of other carriers. The discount, which will last for at least a year, appears to be an attempt to gobble up market share before AT&T and Verizon can roll out direct-to-cell services. The Starlink and T-Mobile service is scheduled to launch in July. (PC Mag)

Hoping to boost its subscriber base, Starlink is offering free kits to consumers in select areas on the condition that they commit to a year of service fees. (The Verge)

Neuralink, Musk’s brain-machine implant company, is looking to raise about $500 million at an implied post-money valuation of $9 billion. (Bloomberg)

In a "progress update," Tesla said that its Semi factory will begin volume production in 2026. Tesla’s Semi production has been plagued by delays for years, with the company originally saying that production would begin in 2019. More recently, Tesla said it planned to begin volume production of its Semi line this year, but that plan has now bled into next year. (Reuters)