According to media reports, Tesla CEO Elon Musk announced on April 22 that starting next month, he will significantly reduce his involvement in matters related to the Trump administration and focus more on managing his various companies.
Recently, Musk's role in the Department of Government Efficiency (DOGE) has become increasingly controversial. He led a federal job reduction initiative within DOGE, which triggered ongoing protests and even led to vandalism at Tesla showrooms. Tesla investors have long expressed concerns that Musk is dedicating too little time to managing Tesla, a worry that has intensified as the company's sales continue to fall.
On his social media platform X, Musk stated that after spending months focused solely on cutting government spending, he is gradually shifting back to his business ventures. The time he frees up from DOGE-related duties will now be reallocated to Tesla and his other companies, including SpaceX, xAI, and Neuralink.
During a conference call with analysts, Musk said, "The foundational work of building the DOGE team and collaborating with the government to streamline public finances is largely complete." However, he added that he still plans to dedicate about 40% of his time to DOGE projects.
Tesla's stock rose 4% in after-hours trading ahead of the earnings call, and gains extended to 5.5% after Musk's remarks. Nonetheless, the stock remains down nearly 50% from its peak in December of last year.
In its Q1 earnings report, Tesla disclosed a net profit of $409 million, a 71% drop compared to the same period last year. Analysts attributed this sharp decline primarily to aging product lines and the impact of Musk's political involvement, which has hurt global sales. Tesla's total quarterly revenue fell 9.2% to $19.3 billion, with automotive revenue plunging 20% to $12.9 billion.
The earnings report also revealed that Tesla earned $595 million from selling carbon credits to other automakers-up from $442 million a year earlier. Excluding this revenue, Tesla would have posted a net loss for the quarter.
Tesla warned that due to the "unpredictable impact of global trade policy changes on automotive and energy supply chains" and the possibility that "political shifts may significantly affect demand for our products in the short term," it will need to reassess its growth outlook in three months.
Tariff tensions are further compounding the uncertainty. Following a reported increase in U.S. tariffs on Chinese goods to 145%, Tesla has paused imports of certain China-made components to the U.S. In retaliation, China has imposed counter-tariffs, prompting Tesla to suspend orders for Model S and Model X vehicles in the country.
Musk reiterated his support for reducing tariffs but acknowledged that Tesla cannot escape the effects of weakened "macroeconomic demand" for vehicles. He noted that economic uncertainty often leads people to delay major capital expenditures like car purchases.
"If not for macroeconomic issues, we would see no drop in demand," Musk stated. However, he also pointed out that tariffs will have a major impact on Tesla's energy business.
