Tesla, quarterly profit plummets 71%. Musk: step back from the Doge
Sales down 9%, 20% in cars. In the storm over his role alongside Trump, Musk will devote no more than two days a week to government. And he asks the President for fewer tariffs
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Tesla ended the first quarter of 2025 with a slump in the accounts and Elon Musk, in the face of the performance and stock market declines of more than 40 per cent since the start of the year, announced that from next month he would spend far less time at the Doge. To be precise he said, no more than two days a week in his controversial position as Donald Trump's anti-waste czar. In the after-market, the shares gained 4.5 per cent after posting a similar rise during the session.
The electric car group's net profit plummeted 71% to $409 million. Revenues fell 9 per cent to 19.34 billion, less than the 21.11 billion analysts were betting on. However, sales in the car business fell by more than double that percentage, by 20 per cent.
Musk, in the budget conference call, spoke about his dual role at the helm of Tesla and Donald Trump's Department of Government Efficiency, a seat that has seen him the subject of intense controversy at home and abroad. He said he will maintain his support for fighting government spending and the federal bureaucracy, 'to make sure they don't go back to the drawing board', but that he will only spend 'a day or two a week' on government issues 'as long as the president wants'.
Musk also distanced himself, at least in part, from another of the White House's signature policies: the imposition of high tariffs on partner countries. "I have said many times that I believe lower tariffs are generally a good idea for prosperity, but that decision is up to the person who is elected, the President of the United States." Musk stated that he will 'continue to recommend lower tariffs instead of higher, but that's all I can do'. The company admitted that trade tensions are straining production and supply chains and increasing costs. A situation that combined with the polarised political climate could weigh on the outlook for the full year, leading to downward revisions of hitherto high expectations. Tesla churns out cars for the domestic market in the US but uses components from abroad, starting with 20 per cent from Mexico, which can fall under tariffs of 25 per cent.
The controversy over the mass firings of federal employees that Musk has promoted to his position alongside the President has created reputational damage and alienated consumers from the Tesla brand. At the same time, investors and analysts have questioned how much attention he can devote to business challenges in the face of political distractions, all the more so while Tesla is under pressure from growing competition from rival manufacturers.
