Elon Musk has announced plans to significantly reduce his involvement in the Donald Trump administration next month to refocus on Tesla, following a sharp 71 per cent drop in the electric car maker’s first-quarter profits.
Speaking during a conference call with investors on Tuesday, Musk said, “Probably in the next month, my time allocation to DOGE will drop significantly,” referencing his role with the “Department of Government Efficiency” (DOGE), a unit he has spearheaded under President Trump.
Tesla reported profits of $409 million for the quarter, with revenue down nine per cent to $19.3 billion. Analysts have linked the decline to a slump in vehicle sales and public backlash over Musk’s political involvement, which they say has tarnished Tesla’s brand.
The company also pulled back from its 2025 forecast, citing uncertainty in trade policy and demand volatility.
“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,” Tesla stated.
“This dynamic, along with changing political sentiment, could have a meaningful impact on demand for our products in the near term.”
Despite the setbacks, Tesla confirmed it remains on course to launch new vehicle models, including more affordable options, during the first half of 2025. The firm also said the rollout of its autonomous Robotaxi in Texas is still expected by June.
Musk struck an optimistic tone on Tesla’s long-term prospects, citing its leadership in robotics, artificial intelligence, and autonomous vehicles.
Musk, who remains the world’s richest person, has donated over $270 million to Trump’s re-election campaign. His involvement with DOGE has drawn sharp criticism, especially after the department gained access to sensitive government databases and pushed through sweeping job cuts across federal agencies.
The restructuring has fuelled concerns about the future of vital government programmes, including Social Security, hurricane forecasting, and humanitarian aid.
Since Trump returned to the White House, Tesla has suffered from public boycotts, vandalism, and a significant dip in sales across several markets. The value of used Teslas has also fallen, suggesting a dent in consumer confidence.
Chief Financial Officer Vaibhav Taneja described the backlash as “unwarranted hostility to our brand.”
Musk defended his government role, calling critics “paid beneficiaries of waste and fraud,” and stated that most of the work with DOGE is now complete.
“I’ll continue to spend a day or two per week on government matters, or as long as the president finds it useful,” Musk said. “But starting next month, I’ll be allocating far more of my time to Tesla.”
His remarks were welcomed by investors, with Wedbush Securities analyst Dan Ives, who had previously urged Musk to step back from government duties, praising the shift.
“Musk just made a huge step forward on call,” Ives wrote on X “DOGE work is ending (1-2 days a week)… now his focus is back on Tesla. Wall Street needed to hear this.”
Tesla also flagged tariffs as a major challenge. The Trump administration has imposed a 25 per cent tariff on imported cars, though Tesla noted it was better positioned than competitors that rely heavily on imports.
“I will weigh in with my advice to the president, which he will listen to… but it’s his decision,” Musk said. “I’ve long said that lower tariffs are generally better for prosperity.”
Tesla shares rose 4.7 per cent in after-hours trading.
