Musk says he will step back from DOGE, refocus on Tesla after earnings plunge
Billionaire Elon Musk said he will step back from the U.S. DOGE Service next month and focus on Tesla, his reeling electric vehicle company, which on Tuesday reported a stunning 71% plunge in profits compared with its 2024 first quarter.
With Tesla suffering amid widespread backlash against Musk’s controversial work with the Trump administration, Musk told investors that his “time allocation to DOGE will drop significantly” starting next month – though he said he probably will maintain involvement with DOGE through the remainder of President Donald Trump’s term.
On Tuesday, the electric vehicle company reported a 9% decline in revenue for the first three months of the year compared with a year earlier, according to a company report. Sales also slipped dramatically in the first three months of the year, falling 13% compared with the same period last year. The company’s stock closed Tuesday at $238 a share, about 37% lower than at the beginning of the year.
Tesla already was struggling before Musk enmeshed himself in GOP politics last year and became a political lightning rod. But a combination of increased competition from Chinese electric carmakers such as BYD, uncertainty around steep tariffs imposed by Trump this month and Musk’s own declining popularity has pushed the company into turmoil.
In a letter to shareholders, Tesla said rapidly evolving trade policy and “changing political sentiment could have a meaningful impact on demand for our products in the near term.” Musk told investors during a company call that he has spoken to the president about the tariffs, but “it’s up to him, of course, to make his decision.”
“I have been on the record many times saying that I believe lower tariffs are generally a good idea for prosperity,” Musk said. “I will continue to advocate for lower tariffs rather than higher tariffs, but that’s all I can do.”
Since Trump’s inauguration, Musk has almost entirely shifted his focus to running DOGE, which stands for Department of Government Efficiency. The agency, housed within the Trump White House, has moved aggressively to reduce what it describes as “waste, fraud and abuse” in the federal government. Sweeping layoffs and budget cuts mandated by DOGE have led to chaos, confusion and backlash across official Washington.
Tesla owners, meanwhile, are trading in their vehicles at an increasing rate; prices for used Teslas have sunk; and widespread protests against the brand have erupted around the world. Vandals have also targeted the company’s dealerships, charging stations and vehicles with molotov cocktails, gunshots and arson. Tesla is the most important business in the portfolio of Musk, the world’s wealthiest person.
Investors and shareholders have become increasingly frustrated with the CEO, as they attribute many of the company’s woes to the upheaval he has caused in the federal government.
Musk, along with the president, had already hinted that he will leave the government when his status as a special government employee expires at the end of May, though the exact timeline is unclear. DOGE’s work is expected to continue after he departs.
The organizers of Tesla Takedown – the group behind hundreds of anti-Tesla protests around the globe – cheered the results, saying in a statement that the quarterly results send a “very clear message” that the organized protests are working.
“Over the past two months, Elon Musk and his ‘DOGE’ team have launched an unprecedented assault on our public services and the rule of law,” Patty Hoyt, a local organizer in Northern California, said in a statement. “The Tesla Takedown grassroots pressure is beginning to hit Tesla where it hurts – the company’s bottom line.”
Gene Munster, a managing partner at Deepwater Asset Management, said 2025 is a “throw away” year for Tesla as the company makes investments in autonomy and artificial intelligence. Musk has said in previous earnings calls that the future of Tesla is “overwhelmingly” autonomous driving, and he has doubled down on his vision of creating a fully self-driving car with no steering wheel or pedals.
Tesla announced plans last year for the fully autonomous Cybercab, a vehicle without a steering wheel and pedals, describing it as a $30,000 lounge on wheels that will launch sometime in the next few years. Musk said earlier this year that his company will start testing its robotaxi in Austin in June, an elusive plan that comes after many years of unfulfilled promises to investors about the technology. The company also submitted an application to the California Public Utilities Commission for a permit to transport passengers in its vehicles, according to emails obtained via a public records request.
Investors expected Musk’s alliance with Trump to deliver a significant boost to Musk’s bet for autonomous vehicles, with hopes that his presence in the administration could ease regulation and lessen the scrutiny on the evolving technology despite a spotty safety record and multiple investigations. But so far the company has only suffered amid the political backlash.
While Munster said the first-quarter earnings were a “train wreck,” he said he is hopeful the company will rebound as Musk pulls back from his government work and refocuses on Tesla.
“That’s the bet we’re making,” he said.