Elon Musk has announced plans to significantly reduce his involvement with the Department of Government Efficiency (DOGE) following a dramatic plunge in Tesla’s profits, which has raised concerns about Tesla’s stock performance. This decision comes in the wake of Tesla’s first-quarter earnings report for 2025, revealing a 71 percent drop in net income compared to the same period last year, alongside a 20 percent decline in automotive revenue. The company reported total revenue of $19.3 billion, falling short of analysts’ expectations of $21.1 billion, highlighting a difficult financial environment for the electric vehicle manufacturer.
“Investors have started to lose patience with the EV giant,” said Josh Gilbert, Market analyst at eToro. “Protests at Tesla showrooms, declining brand loyalty in key markets, and growing consumer backlash have all fueled the current downward spiral.”
Historically, Tesla has only beaten earnings expectations twice in its last eight reports — but those rare wins saw immediate double-digit stock gains of 12 percent and 22 percent respectively.
“Ultimately, Musk needs to deliver some magic and step up to the plate,” added Gilbert. “He’s done it many times before, but this feels like a crucial moment for Tesla.
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Refocusing on core operations
Musk’s role in the DOGE initiative, which he has led since its inception, has drawn considerable scrutiny and criticism. His involvement in the Trump administration has been controversial, with many attributing Tesla’s recent sales slump to the backlash against his political activities. Protests and boycotts of Tesla have emerged globally, fueled by Musk’s high-profile support for the administration and its policies, which have alienated some consumers and investors. In response to these challenges, Musk stated that he would reduce his time commitment to DOGE to just one or two days per week, starting in May 2025. He emphasized that this shift would allow him to refocus on Tesla and its core business operations, which he described as critical for the company’s future.
Musk’s decision to step back from DOGE underscores his recognition of the need to prioritize Tesla’s performance amidst declining sales and rising competition in the electric vehicle market. Analysts have pointed out that the company’s sales dropped by 13 percent in the first quarter, reaching their lowest level in three years. This decline is particularly concerning given that Tesla had previously enjoyed consistent year-over-year growth. Musk has defended his work at DOGE, arguing that it is essential for addressing waste and inefficiency in government, but he also recognized that the political climate has affected Tesla’s brand and sales.
