Before I begin, let me offer a caveat. Some may read this as political commentary—it isn’t. What follows is a reflection from someone who has spent decades studying how leadership and capital shape markets. As an emerging manager in venture capital, I see history playing out again. This is not about ideology but how personalities, systems, and brands collide—and often repeat their mistakes.

I just returned from Japan, stopping in Tokyo and Rikuzentakata, where I spent time with urban planners and technologists working on Japan’s next era of growth. In quiet offices and crowded back-alley cafés, conversations focused on resilience, community, and long-term thinking. Yet even in Japan—far from the day-to-day noise of American boardrooms—one question kept surfacing: What is happening with Elon?

It was asked with a mixture of concern and recognition. We’ve seen this story before.

The risk is inherent when a company aligns itself too closely with a single figure. I thought of Howard Hughes, who turned TWA into a vehicle for personal obsession. I thought of Lee Iacocca, whose public persona once eclipsed Ford’s products. I thought of Steve Jobs, whose brilliance lifted and, at times, exposed Apple. These stories aren’t just echoes—they are warnings.

Today, Tesla is writing its version of that cautionary tale.

Tesla’s unraveling isn’t a mystery. It’s a slow-motion collision we’ve been watching for months. The company that defined the modern EV movement now finds itself caught between operational disruption, public backlash, and the gravitational pull of its founder’s controversies.

From January 2024 to January 2025, Tesla’s European sales plummeted by 45%. In Germany, the decline hit 76% in February alone. In the U.S., Tesla owners—once famously loyal—are cashing out. Trade-ins are at record highs as customers quietly slip away from a brand they once championed.

The financial damage is equally stark. Tesla’s market cap has been halved, from $1.54 trillion to $777 billion. Shares have lost more than 40% of their value in just the first quarter of 2025. This is not fluctuation. This is erosion.

Musk himself is at the center of the crisis. His role as head of the Department of Government Efficiency (DOGE) under President Trump triggered protests worldwide. His embrace of far-right movements and inflammatory remarks have ignited a backlash transcending the showroom floor.

Protests, boycotts, and organized campaigns now shadow Tesla globally. In Europe, vandalism and arson against Tesla facilities have surged. The brand that once symbolized environmental optimism and technical daring has been recast as a lightning rod.

Musk’s persona once accelerated Tesla’s growth. Now, it drags on every balance sheet and brand perception metric.

Meanwhile, rivals are filling the vacuum. Tesla’s self-inflicted production delays—particularly around the Model Y redesign—opened the door for BMW, Rivian, Hyundai, and others to move fast and capture disaffected customers. Their EV offerings come without political baggage or operational chaos.

Tesla, which once dictated terms to the industry, now scrambles to defend territory it previously owned outright.

The message is clear in boardrooms and private calls: investors are growing impatient. Major shareholders are calling for Musk to step aside as CEO, frustrated by distractions—his fixation on X (formerly Twitter), his widening political engagements, and his refusal to stay grounded in Tesla’s core business.

Musk speaks of autonomy, of battery breakthroughs, of Mars. Investors are asking him to focus on factory floors and customer confidence.

Tesla’s current slide fits a pattern I’ve seen before: Hughes, Iacocca, and Jobs—brilliant leaders who built gravity wells around themselves. When leadership becomes an identity, the company can no longer adapt. It becomes brittle, unable to bend without breaking.

Once agile and ambitious, Tesla now feels like an enterprise trapped in its founder’s orbit.

In Rikuzentakata, a city rebuilt after devastation, resilience comes from the collective. Systems are designed to outlive their designers, not depend on them. They are created for the long haul, not for the ego.

Tesla today is smaller than Musk—and that imbalance is bleeding trust, talent, and capital from a company that was once positioned to own the future.

Tesla still has the technical talent to recover and the brand recognition to regain lost ground. It isn’t too late for some—the company’s core strengths remain intact. But for many inside the industry and on Wall Street, the conclusion is growing clearer: Musk’s days as a trustworthy leader are numbered.

The market is shifting, competitors are accelerating, and customers are slipping away. Every day Tesla delays decisive action, it risks ceding not just market share but the future of the EV narrative itself.

The choice now is stark: untether the company from Musk’s shadow or watch as others shape the next chapter of the electric age.

xoxo,

Maximillian Diez, GP, Twenty Five Ventures

P.S. Stay with me on this journey. 

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