Think your return to the office was rough? Musk faces some big
challenges
[May 30, 2025] By
BERNARD CONDON
NEW YORK (AP) — Elon Musk is leaving Washington after a short but
turbulent stint in government and getting back to his numerous
businesses, each with their own set of issues for the billionaire to
address.
Start with his electric car company Tesla. While how much Musk
accomplished in his role as President Donald Trump's chief cost-cutter
is up for debate, it's clear his association with right-wing politics
damaged Tesla's brand and tanked sales.
Musk's social media platform X, formerly Twitter, needs to rebuild its
advertising base; his aerospace company SpaceX appears to be financially
promising but has seen some recent setbacks; and it's unclear if his
satellite business Starlink can keep striking deals without Trump
nearby.
Here's a look at the state of some key Musk businesses.
Tesla trouble
Profits plunged 71% at Tesla in the first three months of the year right
after a Chinese competitor claimed the mantle as the world's biggest
electric car seller.
The big question now: Will Musk's leaving Washington help lure buyers
back?
The answer is crucial to reviving profits because so much else is
uncertain. Tesla's lineup of cars in aging and its foreign rivals have
become much more competitive. They would be taking market share from
Tesla even in the best of circumstances.

Tesla's decision to close down factories as it retooled its best-selling
Model Y, among other temporary problems, contributed to its struggles in
the first quarter. But the blowback from Musk's time in Washington
created doubts for some analysts.
In a note to clients, JP Morgan warned of “unprecedented brand damage.”
And Wedbush Securities said at one point, “This is a full blown crisis."
News earlier this week from Europe doesn't bode well: Sales in April
plunged by half.
Taxis with no driver
Another big test for Musk: Will Tesla's launch of its first ever
driverless taxis prove successful?
Musk has been talking about robotaxis for more than a decade, but next
month they may finally hit the road. He has promised to test 10 or20
robotaxis in Austin, Texas, then ramp that up to hundreds of thousands
by the end of next year.
“Can you go to sleep in our cars and wake up at your destination?” the
billionaire asked investors in a conference call last month, then
answered, “I’m confident that will be available in many cities in the
U.S. by the end of this year.”
Investors are convinced Musk will deliver, judging by the 50% jump in
Tesla stock since he made that statement. But he faces many challenges,
not least is whether technically the taxis will work without hitting
things — or people.
Federal safety regulators last month requested data from Telsa on how
the robotaxis will perform in low-visibility conditions. That request
comes after an investigation into 2.4 million Tesla last year equipped
with Full Self-Driving software after several accidents, including one
in which a pedestrian was killed.
Even if the Austin test goes off without a hitch, Musk faces another
challenge: Waymo.
The driverless taxi company owed by Google parent Alphabet just logged
its ten-millionth trip and is now operating in San Francisco, Los
Angeles, and several other cities.

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President Donald Trump listens as Elon Musk speaks in the Oval
Office at the White House, Feb. 11, 2025, in Washington. (AP
Photo/Alex Brandon, File)
 Ad rebound at X?
After Musk bought Twitter in 2022 and opened it up to all manner of
conspiracy theories, long-time advertisers began to flee. Then Musk
made the situation worse when he threatened to “name and shame”
them, and sued them.
Now advertisers are inching back, though maybe not for a good
reason.
“Some big brands resumed spending on X in part to curry favor with
the Trump administration, or to avoid potential retaliation by
Musk,” said e-marketer analyst Jasmine Enberg,. “But fear is not a
sustainable motivator, and most were spending less than they were
previously.”
She expects X’s ad business will rebound this year, but still be
smaller than it was before Musk bought the company.
Rockets red glare
It's not clear how well Musk's rocket company SpaceX is faring
because the private company doesn't disclose its finances. That
said, news headlines point to both troubles and triumphs.
First the bad development, which came just this week with a spinning
explosion of one of the company's Starship mega rockets over the
Indian Ocean. That followed explosions of two other Starships
earlier this year that sprayed flaming debris across the Caribbean
Ocean.
Undeterred, Musk is vowing several more tests soon but the stakes
are high and the clock is ticking. NASA hopes to use Starship for
future missions to the moon, including one next year that will
attempt a lunar orbit and then send the four astronauts aboard back
home.
The good news is that investors who have gotten a peek at SpaceX's
finances apparently are excited.
A private financing round for the company a few months ago followed
by a private sale of shares recently have reportedly valued SpaceX
at $350 billion, a big jump from a $210 billion estimated value just
a year ago.

It's business, not politics — or is it?
A SpaceX satellite internet subsidiary called Starlink also has been
striking deals to set up in foreign countries. But it's not clear
how much is the result of cold business calculation and how much is
due to politics, an advantage that could disappear as Musk leaves
Washington.
Accompanying Trump on his trip to Saudi Arabia earlier this month,
Musk announced that the country had approved Starlink service for
aviation and maritime use. That followed a decision to grant
approval for the service by regulators in Bangladesh, whose garment
industry would be devastated by Trump's threatened 37% tariff, along
with a string of other deals in India, Pakistan and Lesotho in
recent months.
Next up: South Africa, maybe.
Earlier this month, following Trump's Oval Office dressing down of
that country's president, regulators in the country loosened a rule
in a way that could help Starlink win a foothold in the country.
Musk had called the rule requiring Black partial ownership of any
new foreign venture “openly racist."
The country denies that politics influenced its decision.
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AP Writer Barbara Ortutay contributed to this story from San
Francisco.
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