Elon Musk’s foray into politics is targeted at Tesla, indicating that it’s right to worry about Warren Buffett’s potential to hurt his employees and shareholders.
Musk threw money and influence behind President Donald Trump’s reelection campaign last year, baffled Republican candidates at the rally, whipped his support with X and poured over $290 million back into power.
The world’s wealthiest man is now a prominent advisor to American leaders and is the driving force behind Doge’s ostensible mission to reduce government fraud, waste and abuse.
Musk’s central role in the Trump administration ranks some Americans, triggering boycotts and sales of Tesla vehicles, protesting outside the showroom, and even destroying and destroying the company’s products and property.
Tesla and SpaceX CEOs say he was shocked by the violence and called him “inappropriate and deeply wrong” in an X post earlier this month. “Tesla was just building electric cars and did nothing worthy of these evil attacks.”
In another post, Musk wrote:
I’m away from the trouble
Berkshire Hathaway CEO Buffett openly supported the Democrats until a few years ago. He hosted a Barack Obama fundraiser in 2011 and took the stage at the Hillary Clinton rally in 2016, calling for multiple failed businesses by Trump, refusing to announce his tax returns and calling for the cruel treatment of others. He didn’t support Kamala Harris or other politicians last year.
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The billionaire investor explained why at Berkshire’s annual shareholders meeting in 2022. His previous stance was to “not blindly trust CITICENSHIP as CEO,” but he realized that voicing his political views can anger people and encourage people to “take it out to our company.”
“I obviously retreated. I basically don’t want to say anything attributable to Berkshire. I didn’t let anyone else have the consequences of what I was talking about,” Buffett said.
But Musk and Buffett have completely different goals for shaping political strategies, Sean Lux, an associate professor of practice at the Rawls School of Business at Texas Tech, told Business Insider.
Lux said that it makes sense to him to avoid politics and play well on both sides, as Berkshire Chief focuses on providing consistent, long-term returns regardless of which party is in charge.
Warren Buffett is the CEO of Berkshire Hathaway. Reuters/Rick Wilking
As for masks, his ultimate mission is to reach Mars, and the US government could become a “risky catalyst or obstacle” to those efforts, Lux said.
“Donald Trump’s candidacy gave Elon the historic opportunity to broadly influence US policies in order to support his goals,” Lux said. “Eron was probably the greatest business strategist of his generation and he was unlikely to miss this opportunity regardless of public backlash.”
Business Guru pointed to the Federal Communications Commission’s recent decision to enable SpaceX’s Starlink units to provide direct cell satellite services.
“On its own it would only be worth the cost of Elon’s support for Trump’s campaign.” This is a big step towards musk that will disrupt not only telecommunication giants, but also players like Apple, Meta, and Alphabet.
It can be expensive to speak up
Stephen Cullander, a professor of political and economics at Stanford School of Business, told BI that his political actions were “inevitable.” He said, “The true cost of Tesla will be a loss of sales and a loss to the brand.” This is not a vandalism.
New Tesla registrations in the US fell 11% in January – photos worsened in Europe as sales plummeted by more than 40% in February, industry reports show. Tesla stocks have fallen 45% from its December high.
Callander said that the public is fine with CEOs taking a political stance because they are “part of being authentic,” but the risk is that they are so intertwined with politics that they “overwhelm their business identity.”
“This is the fate of the mask,” he said. The profits of masks from government contracts to businesses will be “overwhelmed by the damages they are inflicting on millions of customers of the public.”
Callander added that business leaders not only measure the risk of public repulsion, but also the possibility of government retaliation. It’s “real concern for many CEOs,” he said. “They’re not just keeping their baggage and not targeting Trump.”
