Tesla chief executive Elon Musk has said he will cut back his work for President Donald Trump after the company’s first-quarter profit dropped by 39 per cent.
Tesla’s first-quarter results, published overnight, showed sales of its electric vehicles plummeted owing to a weak product line-up and a worldwide consumer backlash to Mr Musk’s increased involvement in US politics.
In response the billionaire said he would cut back his work as head of the so-called Department of Government Efficiency (Doge) to a day or two per week starting sometime next month.
Mr Musk’s 130-day mandate as a special government employee in the Trump administration is set to expire around late May.
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“I think starting probably next month, in May, my time allocation to Doge will drop significantly,” Mr Musk told investors on a conference call.
Tesla has faced a troubling few months as deliveries of its aging lineup of electric vehicles have nosedived, Mr Musk’s political activities have drawn protests, and its stock has nearly halved from its December peak. Many investors had been calling for Musk to leave his work as Trump’s adviser and manage Tesla more closely.
His political interventions have also hurt sales in big European markets this year. Tesla is banking on a revival in vehicle demand following the recent upgrade to its flagship Model Y car. Investors are also awaiting details on a new affordable vehicle it has promised.
Adjusted net income for the first quarter fell 39 per cent from a year earlier to $934 million (€818 million), missing analyst expectations for $1.5 billion by a wide margin, according to a filing from the Austin, Texas-based company on Tuesday.
Revenue fell 9 per cent to $19.3 billion, missing the average $21.4 billion analyst estimate, according to S&P Capital IQ.
Earlier this month, Tesla reported that its deliveries fell 13 per cent in the first three months of this year, compared with a year before, marking its worst quarter since 2022. It also lost its crown as the world’s largest electric-vehicle maker to Chinese rival BYD. Tesla’s share price has halved from its high in mid-December.
The group also faces growing risks from Mr Trump’s trade war, which it has warned could make it a target for retaliatory tariffs and increase the cost of making vehicles in the United States.
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Tesla assembles all of its vehicles sold in the US locally but it is still exposed to the sweeping tariffs and disruptions to the global automotive supply chain since it sources components from other markets.
“While the current tariff landscape will have a relatively larger impact on our energy business compared to automotive, we are taking actions to stabilise the business in the medium to long term and focus on maintaining its health,” Tesla said in the earnings filing.
Mr Musk has also clashed with Peter Navarro, the architect of Mr Trump’s trade policies, and the White House has said his government role, which was originally meant to continue into 2026, could end well before that once his work with Doge is complete.
Tesla’s first-quarter operating margin also fell to 2.1 per cent from 5.5 per cent a year earlier. As of Tuesday, Doge estimated on its website that it has saved US taxpayers some $160 billion. However, the group’s calculations have been rife with errors, corrections and incomplete explanations.
– Copyright The Financial Times Limited 2025 and Reuters
