The richest man in the world seems determined to take on the most powerful.
Tesla CEO Elon Musk called President Joe Biden “a damp sock puppet in human form” on Twitter Thursday as Tesla stock plummeted 11%.
Musk’s lack of restraint on social media is, as the saying goes, a feature not a bug, having landed him in legal hot water multiple times. Another Musk tweet—“Biden is treating the American public like fools”—was part of a one-sided Twitter offensive waged against the president. Biden didn’t retaliate, at least not directly. The White House did post a tweet with the president extolling Tesla rivals General Motors and Ford for their work on developing electric vehicles. “Companies like GM and Ford are building more electric vehicles here at home than ever before,” Biden says to GM CEO Marry Barra in the post. Tesla, the world’s biggest EV maker, wasn’t mentioned.
Tesla also wasn’t mentioned Wednesday at a White House event at which Biden heaped praise on the CEOs of GM, Ford and engine-maker Cummins for their work on EVs. It’s not clear if Musk was even invited to attend.
The snub apparently triggered the world’s wealthiest man. Biden’s low approval ratings may be the revenge that Musk ultimately seeks, but the Tesla CEO didn’t confine his angry tweets on Wednesday to schoolyard taunts of the president. He also attacked California Insurance Commissioner Ricardo Lara, saying he should be voted out of office, made odd comments about the United Nations and praised protests by Canadian truck drivers opposed to a U.S. mandate that requires them to show proof of vaccination to enter the country.
“This is not the behavior of a normal, rational CEO,” said John Coffee, a professor at Columbia University Law School. “But we already knew that Musk was not that, even though he’s been highly successful. Even if he’s correct in projecting Biden’s eventual failure, he and his companies can endure an awful lot of pain in the interim. And it will not involve any retaliation by Biden as by now the SEC and other agencies regard him as a sworn enemy.”
Attacks on Biden would be of no consequence if Musk were simply a private citizen or conservative media commentator. But Tesla, the world’s most valuable carmaker, has to stay in the good graces of a host of federal agencies, including the Securities and Exchange Commission, the Internal Revenue Service, the National Highway Traffic Safety Administration, the Transportation Department and the Labor Department.
“This is not the behavior of a normal, rational CEO”
Tesla’s anti-union stance is a point of friction with the Biden administration, which supports the United Auto Workers. Asked about Tesla’s exclusion from an August 2021 White House EV event that included GM, Ford and Stellantis, Biden’s press secretary Jen Psaki told reporters those companies “are the three largest employers of the United Auto Workers, so I’ll let you draw your own conclusions.” Musk, by contrast, was cited by the National Labor Relations Board for discouraging workers at Tesla’s Fremont, California, plant from unionizing.
SpaceX, Musk’s rocket company, also relies on federal contracts from NASA and the Defense Department. As a result, his itchy Twitter fingers run the risk of creating unnecessary headaches for his companies.
In addition to Musk’s past tussles with the SEC that cost him the job of Tesla chairman and a $20 million fine in 2018 for falsely tweeting that he’d arranged funding to take the carmaker private, NHTSA is conducting safety probes of Tesla’s controversial Autopilot system. Should the agency find serious flaws or safety violations, the company could be on the hook for costly recalls.
“Twitter is a blessing and a curse for Musk,” said Dan Ives, an equity analyst for Wedbush Securities. “This is not what the Street wants to see.”
Tesla didn’t respond to a request for comment on Musk’s tweets. (He eliminated the company’s PR team in early 2020.)
Biden’s Wednesday meeting with the CEOs was an effort to drum up industry support for his stalled Build Back Better legislation. Musk’s personality may have been as much an obstacle to inviting him to the meeting as his anti-union stance, says Fernando Guerra, a professor of political science and international relations at Loyola Marymount University in Los Angeles.
“Why would you invite him to a party where he could overshadow things? Why would you invite him to a party where he could publicly say, ‘I’m not going?’” he said. “With him being outside the tent, yes it creates a part of the story, but inside the tent he has the potential to totally derail the messaging.”
Biden isn’t likely to suffer from frosty relations with Musk. “He’s not dependent on Musk’s money. He’s not depending on his endorsement. And Musk’s not representing a state Biden needs now that he’s moved to Texas from California. From a political perspective there’s no cost to excluding him,” Guerra says
Biden’s meeting occurred just prior to Tesla’s announcement of record profit in 2021, powered by sales of nearly 1 million of its high-tech sedans and crossovers.
Musk was evidently prepared to pay any price to escalate his feud with Biden. While he tweeted on Thursday, Musk personally lost $24.5 billion as Tesla stock tanked. The shares regained some ground on Friday, rising 2% to close at $846.35.