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Tesla's reign as EV king is fizzling, so Elon Musk has his sights set on a new goal turning X back into Twitter

Katherine Tangalakis-Lippert   

Tesla's reign as EV king is fizzling, so Elon Musk has his sights set on a new goal — turning X back into Twitter
  • Tesla's stock is down more than 10% in the past year, and Elon Musk's net worth has also fallen.
  • As Tesla struggles, Musk appears to be fortifying his other businesses.

Tesla has been losing its luster this year as demand for electric vehicles wanes and pressures in China mount.

Even the most bullish analysts have said the company was a "trainwreck" in the most recent quarter. And with Elon Musk's net worth falling in stride with the car manufacturer's stock — down more than 10% in the past year, dropping him down to fourth place on the list of the world's richest billionaires after he'd topped rankings — the former golden boy of the tech industry appears to be fortifying his other businesses to prevent further losses.

With his social-media venture, X, that seems to mean returning to the app to the pre-Musk days of plain old Twitter.

"I think the strategy, as it's unfolding right now, is going back to the basics," Gabor Cselle, a former project manager on Twitter's trends team, told Business Insider. "I think the whole thing about making X something dramatically different and reinventing the wheel hasn't really happened, so we're seeing a return to the basics."

In recent weeks, Twitter — sorry, X — has seen the return of status-based blue check marks rolled out for accounts with a large number of verified followers, which CNN's Oliver Darcy said demonstrated Musk's "desperation to lure high-profile users back" to the platform. And, after slashing nearly half the company's staff with significant cuts on the trust and safety team since his acquisition in 2022, the company is said to be reinvesting in the safety of the platform by building a new content-moderation center in Texas and hiring two new higher-ups to oversee moderation.

David Camp, a cofounder of the brand-consultant agency Metaforce, told BI the moves seemed to be an attempt to lure advertisers back to the platform after an exodus following a surge in hate speech on the site.

When Musk bought Twitter, Camp said, he "exhibited a pretty cavalier attitude toward how traditional businesses run" and didn't want to be "shackled" to the dynamics of an ad-driven business, in which the company would have to create and maintain stability and certainty to attract advertisers. But with revenues continuing to fall and user engagement decreasing, Camp said it made sense he'd try to backpedal — though that doesn't mean it'll work.

While loyal users still linger on the platform, Variety reported last fall that X had lost 15% of its worldwide user base since Musk took over. And Musk himself has acknowledged that the platform has lost about 50% in ad revenue during his tenure.

"Regardless of little tactical changes they make to the platform, with the blue checks, or claims of more moderation, from a marketer's perspective and from a brand-building perspective, it's just lip service," Camp said. "Every time he opens his mouth and says something controversial — which he relishes — it further reinforces the perception of Twitter as being an unreliable ad partner, which is why they continue to lose revenue and will continue to have a hard time attracting advertisers."

Musk and representatives for Tesla and X didn't respond to requests for comment from BI.

Cselle said he believed returning to an older, more trustworthy content-moderation or verification model could help Musk regain some of the advertisers who have left and shore up the status that X used to hold in the glory days when it was Twitter. But he said the app was still benefiting from users' "muscle memory," which prompts them to return to the site, rather than Musk's unfulfilled promises to roll out new features and make X an "everything app."

Twitter's downward trajectory could parallel another one of Musk's splashier products: Tesla's Cybertruck. In a December blog post, the public-relations expert Ed Zitron predicted that "Musk's sanity will deteriorate as things sour at Twitter in parallel with the disastrous launch of Tesla's Cybertruck in 2024."

Though it became a status symbol for celebrities such as Kim Kardashian and Jay-Z, the Cybertruck's release has been marred by sharp critique, with new owners of the $80,000-plus vehicle warning of pervasive handprints, stubborn rust spots, and challenges maneuvering the massive vehicle, which weighs more than 6,600 lbs.

"In any case, Musk is going to have to continue to pay both the interest on the debt and make up for Twitter's massive shortfalls in revenue, and may be forced to sell more Tesla stock at a time when the company is beginning to look quite fragile," Zitron wrote.

Camp said Musk had only himself and his increasingly "toxic" personal brand to blame, despite his apparent efforts to make the platform a more brand-friendly place with his hiring of Linda Yaccarino, the former chairman of global advertising and partnerships for NBCUniversal, to serve as CEO of X. Since Yaccarino took the role in June, Musk has appeared to consistently undermine her, whether it be over announcing changes to the platform or curbing antisemitism and hate speech on the site.

"Honestly, the best thing that Twitter can do to regain its position is to sideline Musk. And the only way to do that is if he sells it — and he would have to sell it at a massive loss," Camp said. "So unless he decides, as a human being, that he's matured to the point where he no longer feels the need to be the brash, maverick, unpredictable person that he is and turns the corner into an elder statesman — which I find hard to believe — I don't think anything's going to change."

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