Elon Musk said he would cut down significantly on his involvement with the Trump administration’s Department of Government Efficiency ( DOGE) starting next month, following weeks of mounting backlash over his dual roles and their toll on Tesla’s performance.
The announcement came just hours after Tesla reported a 71% plunge in quarterly profits and a 20% drop in automotive revenue. Total revenue fell 9% year-on-year to $19.3 billion in the January–March period, missing analyst expectations.
"The large slog of work necessary to get the DOGE team in place and working with the government to get the financial house in order is mostly done," Musk told analysts on a Tuesday earnings call. He added, “I think starting probably next month in May, my time allocation to those will drop significantly.”
Backlash brews over Musk’s political role
Musk’s role in the Trump White House has drawn international protests. Demonstrators have targeted Tesla showrooms across the globe, condemning his involvement in federal job cuts. Vandalism and walkouts have been reported in multiple cities.
Tesla CFO Vaibhav Taneja confirmed the impact: “The negative impact of vandalism and unwarranted hostility towards our brand and our people had an impact in certain markets. Despite this, we were able to sell out legacy Model Y.”
Still, Musk stood by his DOGE work. “Working for the government to get the financial house in order is mostly done,” he said. “I’ll continue to advocate for lower tariffs … but that’s all I can do.”
He later added, “I expect to keep working for the government one or two days a week for the remainder of Trump's presidency to make sure that the waste and fraud that we stopped does not come roaring back.”
Investor concerns and market reaction
Tesla’s stock, which had been struggling, climbed 5.5% in after-hours trading following Musk’s announcement to reallocate more time to his companies.
"I think more attention by Musk on Tesla is a net positive for the stock," said Shawn Campbell of Camelthorn Investments. "But to see a meaningful move in the stock we would need to see a headline more like 'Musk to leave DOGE to refocus on Tesla.’"
Tesla shares have lost nearly half their value since peaking in December, coinciding with Musk’s increasing focus on Washington.
Tariffs, trade, and tensions
Tesla is facing serious pressure from shifting trade policies. Recent U.S. tariffs on Chinese imports have hit 145%, prompting China to retaliate. Tesla has since paused imports of key components and halted new Model S and Model X orders in China.
In a statement, the company warned: “Uncertainty in the automotive and energy markets continues to increase as rapidly evolving trade policy adversely impacts the global supply chain and cost structure of Tesla and our peers.”
Musk weighed in on Monday, saying, "I've been on the record many times as saying that I believe lower tariffs are generally a good idea." But he conceded, “This decision is fundamentally up to the elected representative of the people, being the president of United States.”
Missed targets, margin pressure
Tesla’s automotive gross margin excluding regulatory credits dropped to 12.5% from 13.6% in Q4, slightly beating estimates but still reflecting cost pressure. The company’s net income fell sharply, despite cost-saving efforts.
Earlier this month, Tesla revealed deliveries in Q1 declined 13%. Analysts now predict a second straight year of falling deliveries in 2025.
Tesla said the fall was due to factory retooling. “Changeover of Model Y lines across all four of our factories led to the loss of several weeks of production in Q1,” the company said in its release.
New model, same lines
Despite these setbacks, Tesla reiterated its plan to launch a more affordable car in the first half of 2025.
“The ramp might be slower than we had hoped initially,” said Lars Moravy, Tesla’s vice president of engineering. “The models that come out in the next months will be built on our lines and will resemble in form and shape the cars we currently make. The key is they'll be affordable and you'll be able to buy one.”
Reuters previously reported that Tesla plans to offer a stripped-down, U.S.-made Model Y variant as part of its low-cost strategy, though production may be delayed by several months.
Robotaxi dreams
Tesla also reaffirmed plans to launch a robotaxi fleet in Austin, Texas, by June. The project hinges on regulatory approval and remains mired in safety and litigation concerns.
Asked when mass robotaxi deployment could begin, Musk replied, “Millions of Teslas operating fully autonomously by the second half of next year.”
But the competition is intensifying. Just days after Tesla’s announcement, Chinese rival BYD unveiled a new self-driving model priced at just $9,600.
Tesla’s performance slump comes as the electric vehicle market becomes more competitive. Chinese firms, particularly BYD, are eating into global market share. Domestic pressures, tariffs, and reputational damage only add to the turbulence.
Dan Ives of Wedbush summed it up: “We view this as a fork-in-the-road time.”
For now, Musk appears ready to step back from politics — slightly — and refocus on the company that helped build his empire. Whether that’s enough to turn Tesla’s fortunes around remains uncertain.
(With inputs from Agencies)
The announcement came just hours after Tesla reported a 71% plunge in quarterly profits and a 20% drop in automotive revenue. Total revenue fell 9% year-on-year to $19.3 billion in the January–March period, missing analyst expectations.
"The large slog of work necessary to get the DOGE team in place and working with the government to get the financial house in order is mostly done," Musk told analysts on a Tuesday earnings call. He added, “I think starting probably next month in May, my time allocation to those will drop significantly.”
Backlash brews over Musk’s political role
Musk’s role in the Trump White House has drawn international protests. Demonstrators have targeted Tesla showrooms across the globe, condemning his involvement in federal job cuts. Vandalism and walkouts have been reported in multiple cities.
Tesla CFO Vaibhav Taneja confirmed the impact: “The negative impact of vandalism and unwarranted hostility towards our brand and our people had an impact in certain markets. Despite this, we were able to sell out legacy Model Y.”
Still, Musk stood by his DOGE work. “Working for the government to get the financial house in order is mostly done,” he said. “I’ll continue to advocate for lower tariffs … but that’s all I can do.”
He later added, “I expect to keep working for the government one or two days a week for the remainder of Trump's presidency to make sure that the waste and fraud that we stopped does not come roaring back.”
Investor concerns and market reaction
Tesla’s stock, which had been struggling, climbed 5.5% in after-hours trading following Musk’s announcement to reallocate more time to his companies.
"I think more attention by Musk on Tesla is a net positive for the stock," said Shawn Campbell of Camelthorn Investments. "But to see a meaningful move in the stock we would need to see a headline more like 'Musk to leave DOGE to refocus on Tesla.’"
Tesla shares have lost nearly half their value since peaking in December, coinciding with Musk’s increasing focus on Washington.
Tariffs, trade, and tensions
Tesla is facing serious pressure from shifting trade policies. Recent U.S. tariffs on Chinese imports have hit 145%, prompting China to retaliate. Tesla has since paused imports of key components and halted new Model S and Model X orders in China.
In a statement, the company warned: “Uncertainty in the automotive and energy markets continues to increase as rapidly evolving trade policy adversely impacts the global supply chain and cost structure of Tesla and our peers.”
Musk weighed in on Monday, saying, "I've been on the record many times as saying that I believe lower tariffs are generally a good idea." But he conceded, “This decision is fundamentally up to the elected representative of the people, being the president of United States.”
Missed targets, margin pressure
Tesla’s automotive gross margin excluding regulatory credits dropped to 12.5% from 13.6% in Q4, slightly beating estimates but still reflecting cost pressure. The company’s net income fell sharply, despite cost-saving efforts.
Earlier this month, Tesla revealed deliveries in Q1 declined 13%. Analysts now predict a second straight year of falling deliveries in 2025.
Tesla said the fall was due to factory retooling. “Changeover of Model Y lines across all four of our factories led to the loss of several weeks of production in Q1,” the company said in its release.
New model, same lines
Despite these setbacks, Tesla reiterated its plan to launch a more affordable car in the first half of 2025.
“The ramp might be slower than we had hoped initially,” said Lars Moravy, Tesla’s vice president of engineering. “The models that come out in the next months will be built on our lines and will resemble in form and shape the cars we currently make. The key is they'll be affordable and you'll be able to buy one.”
Reuters previously reported that Tesla plans to offer a stripped-down, U.S.-made Model Y variant as part of its low-cost strategy, though production may be delayed by several months.
Robotaxi dreams
Tesla also reaffirmed plans to launch a robotaxi fleet in Austin, Texas, by June. The project hinges on regulatory approval and remains mired in safety and litigation concerns.
Asked when mass robotaxi deployment could begin, Musk replied, “Millions of Teslas operating fully autonomously by the second half of next year.”
But the competition is intensifying. Just days after Tesla’s announcement, Chinese rival BYD unveiled a new self-driving model priced at just $9,600.
Tesla’s performance slump comes as the electric vehicle market becomes more competitive. Chinese firms, particularly BYD, are eating into global market share. Domestic pressures, tariffs, and reputational damage only add to the turbulence.
Dan Ives of Wedbush summed it up: “We view this as a fork-in-the-road time.”
For now, Musk appears ready to step back from politics — slightly — and refocus on the company that helped build his empire. Whether that’s enough to turn Tesla’s fortunes around remains uncertain.
(With inputs from Agencies)
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