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24 May 2025 10:51
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  •   Home > News > International

    Elon Musk's DOGE prompts New York leaders to take aim at Tesla

    Elon Musk has become a hero in some MAGA circles, but Democrats are moving to reverse the help they have given his electric car company in the past.


    For more than a decade, Tesla CEO Elon Musk has had the upper hand on his competitors in New York.

    In 2014, the electric vehicle company carved out a deal with the state government to be the only car maker that could sell directly to customers and bypass franchise dealerships — unlike other car makers that must go through a dealer.

    "They were given an unfair advantage, actually a monopoly on direct sales," Democratic state senator Patricia Fahy told the ABC.

    "But, at the time, I was supportive."

    Tesla has five dealership licences in New York. In previous years, Senator Fahy wanted to give the company even more licences to boost the number of electric vehicles on the road.

    Now she is trying to shut those dealerships down.

    The senator has introduced a bill to revoke Tesla's licences and redistribute them to other EV companies.

    "It is, I guess, making amends," she said.

    "I thought it was important that I step out to show, wait a second, this is a business owner who has made a 180-degree turn and yet we gave him a monopoly. So yes, I did the 180-degree turn as well."

    Democrats in New York have been at the forefront of an anti-Musk movement that has swept parts of the US, sparked by his role as the face of President Donald Trump's cost-cutting operation, DOGE.

    Some are now using their political positions to target his business ventures in response to DOGE's aggressive slashing of government jobs and agencies.

    Another Democratic state senator has introduced a bill calling for an audit of a controversial decade-old deal that allows Mr Musk to operate a mega-plant for a $1-a-year lease, with nearly $US1 billion ($1.53 billion) in benefits.

    Under the legislation, Tesla would be audited to determine if it met a range of job and reinvestment promises it made when signing the deal. If not, the state could claw back subsidies.

    State senators have also called for the divestment of Tesla stock from New York pension funds. New York City's five public pension systems hold more than 3 million shares in the company.

    Mr Musk, who has referred to himself as the president's "humble tech support", is now pulling back from politics.

    He last month told Tesla investors he was cutting his DOGE work down to one or two days a week. This week, he said he would substantially cut his political spending.

    "We actually think that New York helped play a real role in forcing him to step back," Senator Fahy said.

    Musk's retreat

    Mr Musk's initial goal was to find $US2 trillion in savings within the federal government by cutting "waste, fraud and abuse". That was soon halved to a goal of $US1 trillion.

    He has continuously raised concerns about the country's debt and has said that, without deep spending cuts, "the country will go de facto bankrupt".

    "All we're trying to do here is restore the will of the people through the president," he said in a February Fox News interview.

    "And what we're finding is there's an unelected bureaucracy."

    DOGE now says it has saved an estimated $US170 billion, far less than what was initially touted.

    "The progress we've made thus far, I think, is incredible," Mr Musk said during an interview at the Qatar Economic Forum this week.

    "But the magnitude of the savings is proportionate to the support we get from Congress and from the executive branch of the government."

    The cuts have led to agencies such as USAID, which is tasked with administering foreign aid and economic assistance abroad, being completely gutted, with nearly 20,000 workers let go.

    The Trump administration says the savings will better align departments and agencies with the president's "America First" agenda.

    Mr Musk was also the largest individual political donor in the 2024 election race, spending nearly $US300 million, much of it towards Mr Trump's presidential campaign.

    But the tech titan told this week's Qatar forum: "In terms of political spending, I'm going to do a lot less in the future."

    "I've done enough," he said.

    'A lightning rod'

    Mr Musk's work with DOGE has allowed him to be within earshot of the president and enter his inner circle, but it has come at a cost.

    Weekly protests across the US have targeted Mr Musk, accusing him of being an unelected official who has unlawfully slashed government programs and jobs, and of having unfettered access to sensitive information that could pose serious conflicts of interest.

    In some instances, Tesla showrooms and vehicles have been vandalised. The company's stock has been extremely volatile and its profits have also taken a hit, dropping 71 per cent in the first three months of this year.

    "He has proved to be a lightning rod," said political science professor Tim Weaver from New York's University at Albany.

    "And Tesla, I think, as a brand is probably irreversibly tarnished for at least while Trump is still in office … certainly among the kind of people that were most likely to buy Teslas, that is to say relatively well-off, liberal, upper-middle-class people."

    Senator Fahy rejects suggestions that her bill is targeting someone based on their party politics, but says it is about sending a message to condemn the billionaire's actions within the Trump administration.

    "We really began to realise the unfairness of this all," she said.

    "You can't have somebody taking a wrecking ball to state agencies. There's no finessing.

    "I understand in politics [that] the best way to get someone's attention is to hit them in the pocketbooks."

    The president has repeatedly defended Mr Musk and attacked his critics, describing the Tesla boss as a patriot who has been treated unfairly.

    He blamed "radical left lunatics" for Tesla's share price drop earlier in the year and, at a choreographed media opportunity at the White House, he bought an EV from Mr Musk in a show of support.

    "I don't like what's happening to you, and Tesla's a great company," he told the richest man in the world.

    Polls and polarisation

    Musk has garnered a cult following among conservatives and become a hero in some sections of the MAGA movement. He says this is helping to offset any damage to Tesla's brand.

    "Yes, we've lost some sales, perhaps on the left, but we've gained them on the right," he said this week.

    "The sales numbers at this point are strong and we see no problem with demand."

    But Professor Weaver says his "chainsaw" approach to cost cutting has been off-putting to many Americans.

    "People saw throughout the country … that all sorts of people were getting fired who weren't good examples of waste, fraud and abuse but rather were civil servants doing jobs that people approved of," he said.

    "So, I think it's the fact that he was so overzealous to make a big splash and make deep swinging cuts, that really meant that the average person … was very much turned off by the scale, the pace and the cavalier nature of the DOGE cuts."

    Last month an Associated Press/NORC poll found 65 per cent of respondents thought Mr Musk had too much influence on the US government.

    Overall, 57 per cent had an unfavourable view of the tech billionaire.

    But only a quarter of Republicans surveyed disapproved of Mr Musk while 68 per cent viewed him favourably.

    "Polarisation in politics is becoming greater," Professor Weaver said.

    "And so, Musk is one of those people that has become a polarising figure. He didn't used to be. He used to get support from both parties.

    "I think he probably underestimated the downside, particularly with respect to Tesla, but there is a very big upside with respect to these other companies [of his], which are now starting to pay dividends."

    Mr Musk, during his time with the Trump administration, has had a "great deal of access to foreign markets", which could benefit his other companies such as Starlink, SpaceX and The Boring Company.

    As he now takes a back seat with DOGE and spends more time on his business pursuits, Senator Fahy says she believes in redemption.

    "He could redeem himself a lot if he doubled down on some critical energy investments … particularly investments in renewable energies and transitioning our transportation economy," she said.

    "If he were to apply his entrepreneurial skills, what he used to be praised for, he could do a lot."


    ABC




    © 2025 ABC Australian Broadcasting Corporation. All rights reserved

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