Elon Musk Vows To Step Back From Politics as Tesla Reports Steep Drop in Quarterly Profits

Elon Musk says he plans to step away from his work in the Trump administration next month and devote more time to the automaker, Tesla, which reported Tuesday that profits plummeted by 71 percent in the first quarter of 2025.“I think starting next month, May, my time allocation to DOGE will drop significantly,” Mr. Musk told investors, referring to the group he leads, the Department of Government Efficiency. “I’ll continue to spend a day or two per week on government matters for as long as the president would like me to do so, and as long as it is useful.”“Starting next month I’ll be allocating far more of my time to Tesla, and now that the major work of establishing the Department of Government Efficiency is done,” he said.The electric carmaker’s earnings report for the quarter also missed analysts’ expectations, signaling ongoing struggles for the industry leader. During the first three months of the year, Mr. Musk was devoting more and more of his time to managing the DOGE project, meant to cut $1 trillion from the federal budget, and taking an active role in populist politics both in America and Europe.Mr. Musk told Tesla investors that his role in the Trump administration has come with a cost. “The DOGE team has made a lot of progress in addressing waste and fraud,” he said, adding “the natural blowback from that is those who were receiving the wasteful dollars and the fortune of dollars will try to attack me and the team and anything associated with me.”“The negative impact of vandalism and unwarranted hostility towards our brand, and our people, had an impact in certain markets,” Mr. Musk said.The company’s revenue dropped by 9 percent year-over-year, totaling $19.3 billion for the quarter. Revenue from vehicle sales alone fell 20 percent compared to the same period in 2024. The declines coincide with a broader slowdown in deliveries, which Tesla earlier stated dropped 13 percent in Q1 2025 compared to a year prior.Tesla attributed part of the delivery shortfall to a production shift in its Model Y. “A changeover of Model Y lines across all four of our factories led to the loss of several weeks of production in Q1,” the company said in a statement. However, Tesla added that “the ramp of the New Model Y continues to go well.”Mr. Musk’s temporary governmental role in the Trump administration has drawn increased scrutiny from some Tesla shareholders, many of whom have — along with analysts from the big Wall Street banks — suggested he step away from his government work and return to the private-sector full-time. Mr. Musk was optimistic about the future of the carmaker he created. He told investors that Full Self-Driving, a suite of advanced driver-assistance features offered by Tesla, should be available “in many cities later this year.” Self-driving is currently a “supervised” system, meaning it requires the driver’s active supervision and intervention, even when engaged.He also said Tesla is moving swiftly to develop autonomous humanoid robots. “We’re making good progress on Optimus,” he said, referring to the humanoid robot that the company eventually plans to sell to both businesses and consumers.The chief executive said Tesla expects to scale Optimus “faster than any product, I think, in history,” adding that the company should be able to produce 1 million Optimus units a year in less than five years.Musk says that “we’ll start to see the prosperity of autonomy take effect” materially mid-2026. The CEO said once autonomy begins to take off, it will be “exponential.”Mr. Musk also told investors that reports of Tesla’s demise are premature. “There’s never a dull moment,” he said, noting there will be “some unexpected bumps this year.” Still, he said “we’re not on the ragged edge of death. Not even close.”In its earnings report, Tesla pointed to changes in global trade policy and its impact on the automotive sector as a significant challenge. “Uncertainty in the automotive and energy markets continues to increase as rapidly evolving trade policy adversely impacts the global supply chain and cost structure of Tesla and our peers,” the company said. Mr. Musk specifically flagged the effects of recent auto tariffs imposed by President Trump, warning of cost increases for imported components. “I will weigh in with my advice with the president … but then it’s up to him,” he told investors on the call. “I’ll continue to advocate for lower tariffs rather than higher tariffs, but that’s all I can do.”Despite Tesla’s comparatively strong domestic supply chain, the automaker continues to grapple with higher production costs and rising competition from rivals, particularly Chinese manufacturers like BYD. BYD recently unveiled advancements in self-driving technology, priced at just $9,600 for its vehicles, undercutting Tesla and intensifying the competitive landscape.In its earnings report, Tesla said it remains optimistic about its long-term growth potential, citing new ventures like autonomous taxis as key revenue streams. Mr. Musk announced in January that Tesla would launch its robotaxi test program in Austin, Texas, in June 2025. However, the announcement drew swift competition from BYD, which revealed its own self-driving features within days, positioning them as an economical alternative.Tesla, which experienced its first year-over-year sales decline in more than a decade in 2024, has seen its stock value drop by about 50 percent since late last year.

Elon Musk Vows To Step Back From Politics as Tesla Reports Steep Drop in Quarterly Profits

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