Elon Musk has revealed plans to reduce his involvement in the Trump administration’s Department of Government Efficiency (Doge) initiative following a significant drop in Tesla’s profits and revenue for the first quarter of 2025.
Tesla reported a 70% decrease in profits and a 20% decline in automotive revenue compared to the same period last year, amid growing concerns about Musk’s political connections and the company’s strategic path. The electric vehicle giant’s total revenue for the quarter stood at $19.3 billion, a 9% decline from the previous year and far below analysts’ expectations of $21.1 billion. Additionally, vehicle deliveries fell by 13%, marking the lowest numbers in three years.
Read more: Elon Musk’s DOGE Exit Triggers Speculation of Trump Administration Rift
The disappointing results come during a challenging period for Tesla, exacerbated by mounting backlash over Musk’s political role. Musk, a major donor to Trump’s re-election campaign with over $250 million, also leads the Doge initiative, a controversial plan to reduce federal spending and government employment. In response to the criticism, Musk acknowledged the growing concerns and announced that he would scale back his involvement in the initiative, limiting his commitments to just one or two days a week starting next month.
The move comes amid widespread protests and calls for Tesla boycotts, as critics claim Musk is prioritizing politics over the company’s growth. Despite this, Musk defended his work, stating that his involvement in the Doge initiative was essential and mostly completed. Tesla refrained from offering a growth forecast, warning that changing political climates and evolving trade policies could continue to affect demand and supply chains.
The company also noted the negative impact of tariffs on Chinese imports, as Tesla depends heavily on Chinese-made components for its vehicle production. Musk acknowledged the challenges posed by these tariffs but reiterated his support for lowering them. Meanwhile, Tesla’s AI ambitions, considered crucial for long-term growth, continue to face skepticism, especially during periods of poor financial performance.
Tesla’s stock, which has fallen 37% this year, saw a modest 5% rise in after-hours trading following the earnings call. However, analysts warned that Tesla’s growing competition, shrinking demand, and political controversies could put additional strain on the company’s future. Investors are raising concerns about the company’s leadership priorities and long-term strategy.
