Elon Musk’s D.O.G.E puts spotlight on his company spendings

Elon Musk, the genius billionaire behind Tesla, SpaceX, and now the Department of Government Efficiency (D.O.G.E), has vowed to cut wasteful spending in Washington under his “best friend” President Donald Trump’s administration.

But according to a Jan. 28 report from Bloomberg, Elon’s plan to “delete” entire federal agencies is eerily similar to the aggressive cost-cutting methods he’s used across his companies.

But Elon’s corporate history raises serious questions about his efficiency claims, with employees pointing to instances of spending chaos, expensive errors, and sudden policy reversals, per the report.

Tesla’s money-burning decisions

In Tesla’s early days, Elon prioritized speed over cost. When the electric vehicle maker struggled to meet production demands for its Model S sedan, Elon opted to fly in tires from the Czech Republic instead of waiting for slower, cheaper shipping options. He admitted then in 2013 that:

“We had to fly a lot of stuff, and when you fly something, it can cost 10 times as much.” He called the decision “really inefficient” but necessary to keep production moving.

Admittedly, Elon does have a reputation for quick, high-risk decisions that often lead to costly outcomes. In 2018, Tesla unveiled what Elon called “the most sophisticated parts-conveyance system in the world” to automate Model 3 production.

Weeks later, Elon tore the system out, calling it a “mistake” and blaming “excessive automation.” That year, Tesla burned through $1.79 billion before Model 3 sales stabilized the company’s finances.

Layoffs have also been a double-edged sword. In 2022, Elon slashed more than 10% of Tesla’s workforce, including critical teams like the Supercharger division, only to rehire some employees later.

A similar reversal came in 2019 when Elon announced plans to close Tesla showrooms to save money, only to backtrack when faced with the reality of long-term lease agreements.

The Bloomberg report described Elon’s decision-making as a high-stakes balancing act, where urgency often takes precedence over financial discipline. As one longtime Tesla analyst, Gene Munster, put it, “Elon’s efficiency is a ledger with wins on one side and losses on the other.”

Twitter’s costly missteps and the D.O.G.E

Elon’s $44 billion Twitter acquisition in 2022 adds another chapter to his spending saga. Shortly after the deal closed, the billionaire ordered the shutdown of a data center in Sacramento as part of a cost-cutting effort. The decision caused widespread technical problems.

In his 2023 biography, Elon admitted, “I was told we had redundancy across our data centers. What I wasn’t told was that we had 70,000 hard-coded references to Sacramento. There’s still s—t broken because of it.”

The financial impact of this decision wasn’t disclosed, but the fallout underscored Elon’s shoot-first, fix-later approach. At his iconic Boring Company, his tunneling venture, similar stories came out. In one case, Bloomberg claims a delayed truck carrying vital components forced staff to hire a local contact to track down the vehicle and redirect it. Renting entire trucks for single parts was reportedly not uncommon.

Now, Elon’s D.O.G.E initiative faces its own set of challenges. Tasked with cutting $2 trillion from the federal budget by July 4, 2026, D.O.G.E inherits Elon’s trial-and-error approach. Critics say that while Silicon Valley investors tolerate short-term losses for long-term gains, Washington’s bureaucracy operates differently.

Tesla spent nearly a decade operating at a loss before posting its first annual profit in 2020. During that time, the company’s stock surged, rising over 5,000% as investors bet on its long-term potential. But not all of Elon’s bets have paid off.

Twitter, now called X, has lost roughly 70% of its value since Elon’s takeover, leaving banks that financed the deal with $13 billion in unsellable debt. Bloomberg’s report claims that banks are now offering a stake in Elon’s AI company, xAI, as collateral to offload some of that debt.

D.O.G.E faces a steeper hill to climb. Unlike Silicon Valley, where failure is often a learning opportunity, government inefficiency comes under immediate public scrutiny. Still, though, Elon remains confident in his ability to deliver.

After initially predicting that D.O.G.E could slash $2 trillion from the federal budget, Elon recently tempered expectations, saying, “If we try for $2 trillion, we’ve got a good shot at cutting $1 trillion,” as Cryptopolitan reported on Jan. 9.

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