What Elon Musk Teaches Us About Reputation Risk
Elon Musk’s past year has delivered a sharp lesson for business leaders: reputation is not a side issue — it’s central to business value.
Elon Musk’s 2024–25 journey is a case study in how personal reputation can directly influence corporate performance. While Musk remains one of the world’s most recognisable entrepreneurs, recent events have shown that even the most visionary leaders are not immune to the consequences of brand and reputational damage.
Lesson 1: Personal Reputation and Corporate Value Are Inseparable
Tesla’s share price has fallen over 50% from its peak, a staggering decline for a company once considered the future of transport. In parallel, Tesla’s global deliveries declined 1% last year, breaking a decade-long growth streak. In Australia, sales have been even harder hit — down 48%, with the Model 3 suffering a 70% drop.
While market factors play a role, investor commentary and analyst reports repeatedly cite Musk’s increasingly controversial public profile as a key contributor. This is a clear reminder that a CEO’s reputation is not detached from the company’s — it is the company’s reputation, especially for founder-led brands.
Lesson 2: Stakeholder Confidence Can Erode Quickly
Major Tesla shareholders, including pension funds managing billions in assets, have raised concerns about Musk’s divided focus. Their calls for stronger governance and for Musk to recommit at least 40 hours per week to Tesla highlight a second key point: stakeholders will act when leadership behaviour threatens business performance.
The lack of visible response from Tesla’s Board has only fuelled discontent — a stark example of how governance structures must be prepared to protect organisational reputation by holding leaders accountable, even if those leaders are larger-than-life personalities.
Lesson 3: Public Perception Is Shaped by More Than Performance
Musk’s political entanglements — including his role at the Department of Government Efficiency (DOGE) and highly public Oval Office appearances — brought personal views and controversies into the Tesla narrative. His public split with Donald Trump over a tax bill has only amplified attention.
Media outlets and social platforms have become increasingly critical of Musk, moving beyond his business achievements to scrutinise his political involvement and personal life, including viral images involving his son, X. The lesson: reputation today is shaped not just by business success but by broader public perception, which leaders cannot afford to ignore.
Lesson 4: Recovery Requires Focus and Authenticity
Musk appears to be recalibrating. Announcements of Tesla’s push into robotaxi technology and a renewed focus on innovation show early signs of a reputational reset.
For leaders, the message is that reputation recovery is possible — but it requires visible, authentic refocus on the business’s core strengths, not PR stunts, defensive posturing or silence.
Final Thought
Elon Musk’s past year offers an undeniable lesson: leadership reputation is a strategic asset that demands active management. In an age where business, media, and personal identity blur, reputation is never earned once and banked forever — it’s built, defended, and rebuilt every day.