AUSTIN, Texas (Diya TV) — Elon Musk announced Tuesday he will scale back his role in Washington to focus more on Tesla after the electric vehicle maker posted a steep 71% drop in first-quarter profits and missed Wall Street expectations.
On a conference call with analysts, Musk said he plans to “spend more time at Tesla starting in May,” a move that immediately boosted investor confidence. Tesla shares rose nearly 5% in after-hours trading, closing at $247.53.
The shift comes amid rising pressure from shareholders and analysts who argue Musk’s political involvement, particularly his leadership role in the Department of Government Efficiency (DOGE), a controversial Trump-era initiative aimed at cutting federal jobs, has distracted from Tesla’s core business.
Created under former President Donald Trump, DOGE has drawn fire for pushing aggressive job cuts and for its alleged misuse of voter data, prompting lawsuits and public backlash. Though supporters claim the initiative is fighting fraud and reducing wasteful spending, its political baggage has followed Musk and, by extension, Tesla.
“This is a big step in the right direction,” said Wedbush analyst Dan Ives. “Musk getting back to basics at Tesla is what investors have been waiting for.”
Tesla reported a quarterly profit of $409 million — just 12 cents per share — down from $1.4 billion a year ago. Revenue dropped 9% year-over-year to $19.3 billion, driven by weaker vehicle deliveries and mounting global competition.
The company’s gross margins slipped to 16.3%, compared to 17.4% a year earlier, reflecting growing price pressures in the EV market. Chinese automaker BYD has ramped up competition with new ultra-fast battery tech, while European manufacturers have launched models boasting advanced features.
Adding to Tesla’s challenges, U.S. tariffs targeting key materials are expected to hit its energy business, and retaliatory tariffs from China have already forced the company to stop taking orders for its premium Model S and Model X in the country.
Some investors blame Musk’s ties to DOGE and his outspoken support for far-right politicians for Tesla’s faltering performance and battered brand image abroad. The controversy was front and center earlier this year when protesters interrupted a Tesla shareholder meeting over Musk’s federal advisory role.
“His brand has taken a hit due to his political affiliations,” said Adam Crisafulli of Vital Knowledge in a note to investors. “Stepping back from DOGE may not be enough to reverse that damage.”
To shift focus back to innovation, Musk outlined two major product launches for 2025. A more affordable version of Tesla’s top-selling Model Y SUV is expected in the first half of the year, aimed at boosting volume sales.
Even more ambitious is Tesla’s plan to launch a fully autonomous robotaxi service starting in Austin this June. Musk claimed that “millions of Teslas” will be capable of full self-driving by the second half of 2025, promising passengers could “go to sleep in our cars and wake up at your destination.”
Despite the rocky quarter, Tesla reported a notable jump in operating cash flow — $2.2 billion, up from $242 million a year earlier — and increased revenue from regulatory credit sales, which rose to $595 million.
With Musk now pledging to recommit to Tesla, the company is betting that its founder’s renewed focus can help steer it through a turbulent time marked by political controversy, fierce global competition, and cooling demand for EVs.
