Tesla CEO Elon Musk announced on Wednesday he will begin scaling back his controversial role in the White House’s “department of government efficiency” (Doge) next month, as the electric carmaker reported a 71% drop in quarterly profit amid ongoing backlash over his political involvement.
Speaking on an investor call, Musk said the work to get the government’s “financial house in order is mostly done” and that his time allocation to Doge would “drop significantly” starting in May.
Tesla reported a profit of $409 million for the first quarter of 2025, down from $1.39 billion in the same period last year. Revenue fell 9% to $19.3 billion, well below Wall Street expectations of $21.45 billion.
The carmaker’s earnings per share of 27 cents also missed analyst forecasts of 43 cents, following a 13% drop in vehicle deliveries to 336,681 units – marking Tesla’s worst quarterly performance since 2022.
Musk said he expects to spend one to two days per week continuing “critical work” at Doge “for as long as the president would like me to do so and as long as it is useful”. His formal role as a special government employee is scheduled to end on May 30 due to a 130-day service limit.
Despite acknowledging “rocky moments” for the company, Musk remained optimistic about Tesla’s future, highlighting plans for fully self-driving cars and the upcoming Robotaxi service.
“The acid test is, can you go to sleep in your car and wake up in your destination and I’m confident that will be available in many cities in the US by the end of this year,” he said.
Analysts attribute Tesla’s difficulties to multiple factors but conclude that Musk’s role in the White House has caused a significant branding crisis, with existing owners selling their vehicles, instances of vandalism against Teslas, and the Vancouver International Auto Show removing the company from its March lineup.
The company also recently recalled 46,000 Cybertrucks – nearly all that had been sold.
Musk claimed the drop in demand was due to macroeconomic trends rather than branding issues. “Tesla is not immune to the macro demand for cars,” he said. “When there is economic uncertainty, people generally want to pause on doing a major capital purchase like a car”.
However, analysts remain unconvinced. Wedbush Securities noted in a report: “If Musk leaves the White House there will be permanent brand damage…but Tesla will have its most important asset and strategic thinker back as full time CEO”.
Tesla declined to provide guidance for the next quarter, citing “shifting global trade policy on the automotive and energy supply chains” but warned that “changing political sentiment” could significantly impact short-term demand for its products.
(information from The Guardian)
