Tesla CEO Elon Musk announced that he will reduce his involvement with the Department of Government Efficiency starting next month after the company reported disappointing earnings, which fell short of Wall Street’s expectations.
During an earnings call on Tuesday, Musk revealed that he would begin stepping back from his role in the Trump administration next month and shift his focus back to Tesla, which has been facing significant challenges.
He explained that the ongoing backlash against Tesla, which includes nationwide protests and violent attacks on its vehicles, left him with two options: either allow the government’s waste and fraud to continue or fight it.
“I believe the right thing to do is to fight the waste and fraud and get the country back on the right track,” Musk said, confirming that while he would reduce his time with the government agency in May, he planned to remain involved for a day or two each week for the remainder of Trump’s term.
Musk added that, starting next month, he would devote more of his time to Tesla. This decision comes after the company reported its lowest revenue since the third quarter of 2021.
Tesla’s earnings per share (EPS) came in at $0.27, well below the expected $0.39, and the company’s revenue of $19.34 billion missed the analysts’ forecast of $21.11 billion.
Net income dropped 71% in the first quarter, and Tesla’s stock is down by approximately 40% year-to-date, though it rose by 4% in after-hours trading.
Tesla has been plagued by a series of bad headlines, including reports of declining sales, customers abandoning their cars, and the price of used Tesla vehicles plummeting.
A recent CNBC poll found that nearly half of Americans view Musk and the company negatively, especially after Musk’s efforts to slash federal bureaucracy while running DOGE, a new initiative tied to the Trump administration.
Additionally, violent attacks against Tesla vehicles have increased to such a degree that the Justice Department recently announced the formation of a task force to investigate the company.
Earlier in the day, climate activists vandalized a Tesla showroom in Manhattan with the words “F*** DOGE” painted on its walls. Musk, during his earnings call, suggested that some of these demonstrations were “paid for” and were supported by people benefiting from “wasteful largesse.”
But Tesla’s problems don’t end there. After President Donald Trump imposed tariffs on China, the country retaliated with a 125% tariff on Tesla’s cars, causing the company to halt new orders for its Model S and Model X from Chinese customers.
Musk, who was initially seen as one of the biggest beneficiaries of Trump’s tariffs, stated that he would continue to advise the president on financial policy, but emphasized that Trump’s decisions are his own.
While most of Tesla’s vehicles are made in the US, the company still depends on parts from China and Mexico, which are subject to tariffs.
Tesla executives have acknowledged that the ongoing trade tensions and tariffs are creating financial challenges for the company.
Looking to the future, long-term investors are hopeful that Tesla’s advancements in artificial intelligence and robotics will help it recover.
Tesla is set to debut its first robotaxi pilot in June in Austin, Texas. “The future of the company is fundamentally based on large-scale autonomous cars and vast numbers of autonomous humanoid robots,” Musk said during the call.
However, Tesla’s automotive sector, which makes up the majority of the company’s revenue, has been struggling. Sales fell by 13% during the first quarter of this year.
Last week, Reuters reported that Tesla delayed the US launch of an affordable electric vehicle, which was originally scheduled for the first half of this year.
“I continue to believe that Tesla, with excellent execution, will be the most valuable company in the world by far,” Musk stated, encouraging investors to look past the current struggles and toward a brighter future for the company.
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