Musk’s turbulent year: From plunging profits and boycotts to a trillion-dollar payday

For most business leaders, a year marked by plunging profits, lawsuits, boycotts, and federal investigations would spell disaster. But Elon Musk is not most business leaders.

Despite a string of setbacks, the world's richest man has become even wealthier this year — and shareholders at Tesla could soon make him richer still. The electric carmaker is set to vote next month on a proposed trillion-dollar pay package for Musk, betting that his bold vision for a "robot army" and other futuristic technologies will pay off, even as some of his earlier promises remain unmet.

"The genius of Elon Musk is keeping investors focused on what the company might look like in five or ten years — while ignoring very near-term challenges," said Garrett Nelson of CFRA Research. Zacks Investment's Brian Mulberry put it more bluntly: "Your average CEO would likely not survive this."

Musk began the year with a controversial government role as head of President Donald Trump's Department of Government Efficiency (DOGE), pledging to slash $2 trillion in spending — a goal he later halved. DOGE ultimately claimed $240 billion in savings, though experts question whether those cuts were sustainable, with many essential roles now being refilled.

"He cuts without a plan, without regard to function," said Elaine Kamarck, a senior fellow at the Brookings Institution, noting that 17,000 government positions are now being reinstated.

Musk's cost-cutting tactics have also resurfaced in his management of X, formerly Twitter. In recent months, he quietly settled lawsuits brought by about 2,000 former employees and executives who alleged wrongful termination or unpaid severance. The settlements' total cost remains undisclosed but could amount to hundreds of millions of dollars for a company still struggling with a collapse in advertising revenue.

Adding to his woes, Tesla reported a 37% plunge in third-quarter earnings on Wednesday. While vehicle sales rose 6% as customers rushed to take advantage of an expiring tax credit, overall demand is expected to drop sharply, as consumers turned off by Musk's polarising political views continue to boycott the brand.

A year ago, Musk had projected sales growth of up to 30%.

Despite the decline, Tesla shares have rebounded in recent months, doubling since May after Musk's much-publicised exit from DOGE. The stock is now up nearly 9% for the year, boosting his personal fortune by $62 billion to $483 billion, according to Forbes.

Investors appear willing to overlook short-term turbulence, focusing instead on Musk's next ventures — from driverless robotaxis to home and factory robots. Yet many of these projects remain in early stages. Tesla's robotaxi service, operating in Austin and San Francisco, still requires human "safety monitors," and regulators are scrutinising its self-driving technology. US authorities have opened four investigations this year, including one into Tesla's failure to promptly report accidents involving its software.

Musk has a history of overpromising and missing deadlines, only to rebound later. Investors who endured Tesla's production struggles in 2018 eventually saw the stock soar as the Model 3 found success.

"He frequently teeters on the edge of disaster," said Nancy Tengler, a longtime Tesla investor. "And then he pulls back just in the nick of time."

Even so, analysts warn that expectations are sky-high. While the average S&P 500 company trades at 24 times next year's projected earnings, Tesla's valuation stands at a staggering 250 times — reflecting both boundless faith in Musk's vision and the enormous risks if he falters.

For Elon Musk, a year that would have broken most CEOs is shaping up to be another paradoxical triumph — a turbulent yet spectacular ride that only he could pull off.