Elon Musk is redirecting his focus back to Tesla following a 71% decline in profit, promising to significantly reduce his government work and start using DOGE in May. The electric vehicle giant reported first-quarter earnings of just $409 million, down from $1.4 billion in the same period last year, sending shockwaves through the investment community. This strategic shift comes as Tesla battles increasing competition and political backlash against Musk’s conservative political alignment.
Musk Prioritizes Tesla Amid Financial Struggles
The Tesla CEO announced during the company’s earnings call that he plans to devote more time to the automaker while scaling back his role with the Department of Government Efficiency (DOGE). This decision follows Tesla’s 71% profit decline and nearly 40% stock price drop since January, raising serious concerns among shareholders who have seen their investments lose significant value.
Tesla reported a 71% drop in quarterly profits Tuesday as analysts warn of brand damage over CEO Elon Musk's work in the Trump administration. Musk said he would be "significantly" reducing his time on the "DOGE" effort over the next month.https://t.co/TjpPwTJSjY
— AFP News Agency (@AFP) April 22, 2025
The financial challenges extend beyond profits, with total revenue decreasing by 9% to $19.3 billion and car sales revenue dropping 20% compared to the previous year. Vehicle deliveries also fell by 13% in the first quarter, marking Tesla’s first year-over-year sales decline in over a decade and signaling potential market saturation or increased competition in the electric vehicle space.
Political Alignment Impacts Tesla’s Bottom Line
Musk’s increasingly visible conservative political stance and support for Donald Trump have alienated many of Tesla’s traditionally left-leaning customer base. The company directly acknowledged this issue, with Tesla’s CFO specifically mentioning the negative impact of “vandalism and hostility towards the brand” in specific markets where Musk’s political views have triggered backlash.
Elon Musk says he’ll reduce his role in a federal jobs group and dedicate more time to Tesla following a 71% drop in profits. Tesla plans new products, including a cheaper Model Y and a driverless robotaxi service. https://t.co/isIVH9EpG8
— FOX 11 Los Angeles (@FOXLA) April 23, 2025
The Tesla CEO addressed these concerns during the earnings call, stating, “Starting probably in May, my time allocation to DOGE will drop significantly.” This announcement temporarily boosted Tesla’s stock price as investors reacted positively to Musk’s renewed commitment to the automaker, which had made him the world’s richest man before recent market struggles.
Global Competition and Future Innovations
Tesla faces mounting pressure from international competitors, particularly Chinese automaker BYD, which has made significant advancements in battery technology and autonomous driving systems. Despite these challenges, Tesla remains the top-selling electric vehicle (EV) brand in the United States and maintains its position as the most valuable automaker by market capitalization. However, its leadership position appears increasingly vulnerable.
“Starting next month, I’ll be allocating far more of my time to Tesla,” Musk promised shareholders, acknowledging the need for hands-on leadership during this critical period.
The company continues developing next-generation technologies, including robotics and fully autonomous vehicles, with Musk announcing a robotaxi test program in Austin, Texas. Tesla attributes some of its current struggles to shifting trade policies and supply chain disruptions, warning that “changing political sentiment and tariffs could impact demand and business stability” in the coming months as the presidential election approaches.
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