Elon Musk announced Tuesday that he will significantly reduce his role in the Trump administration next month to refocus on Tesla, following a steep 71% drop in the company’s first-quarter profits.
“Probably in the next month, my time allocation to DOGE will drop significantly,” Musk said during Tesla’s earnings call, referring to his involvement in the “Department of Government Efficiency.”
Tesla posted a $409 million profit, with revenue falling 9% to $19.3 billion, driven by a slump in auto sales. Analysts attribute the decline to brand damage linked to Musk’s close association with President Donald Trump and his role in the federal workforce cuts.
Citing growing unpredictability in trade policy and demand, Tesla withdrew its 2025 guidance. “Uncertainty in the automotive and energy markets continues to increase as rapidly evolving trade policy adversely impacts the global supply chain and cost structure,” Tesla stated.
Despite the challenges, the company said it remains on track to launch more affordable EV models in the first half of 2025, along with the debut of its Robotaxi in Texas by June.
DOGE Role Nearing Completion
Musk, who donated over $270 million to Trump’s 2024 campaign, has drawn criticism for his leadership at DOGE, which has overseen deep cuts to federal programs and gained access to sensitive data. His involvement has sparked consumer backlash and vandalism targeting Tesla, alongside falling sales and used vehicle prices.
Defending his work, Musk dismissed his critics as beneficiaries of “waste and fraud,” but acknowledged that his work at DOGE is “mostly done.” He plans to remain involved at a reduced capacity.
“I think I’ll continue to spend a day or two per week on government matters,” he said. “But starting next month, I’ll be allocating far more of my time to Tesla.”
Tesla CFO Vaibhav Taneja called the market’s reaction “unwarranted hostility.”
Wall Street welcomed the shift. Wedbush analyst Dan Ives said Musk’s decision to wind down DOGE involvement was a “huge step forward.”
Tesla also pointed to new tariffs—25% on imported vehicles—as another challenge, though it claims to be better positioned than competitors heavily reliant on imports.
“I will weigh in with my advice to the president… but it’s his call,” Musk said. “I’ve long supported lower tariffs as a path to prosperity.”
Tesla shares rose 4.7% in after-hours trading.
