Elon Musk is set to bow out of his government duties under the Trump administration as he can no longer turn his back to Tesla’s dropping profits. The EV giant’s boss told Tesla investors that his hours at the Department of Government Efficiency (DOGE) will “drop significantly” starting in May.
As President Donald Trump’s so-called “First Buddy,” Musk doubled down on cutting tens of thousands of federal jobs, believing in his goal to slash waste and fraud. However, his time with DOGE has been nothing short of a nightmare. In addition to critics accusing the cost-cutting initiative of accessing voters’ private data and questioning the erasure of crucial American programs, Musk’s time in the government has further resulted in Tesla boycott campaigns and cases of vandalism.
Tesla profits slip out of control
On the numbers side of the conversation, Tesla’s sales have undoubtedly sustained a major blow, as revealed in the company’s first-quarter earning announced on Tuesday. According to CBS News, Tesla couldn’t meet analyst expectations, as revenue fell 9% and profits plunged 71% to $409 million. The company’s shares, which fell 41% this year as Musk’s Tesla became synonymous to the Trump agenda, ultimately soared 4% to $247.53 after the billionaire promised to shift his focus back to the EV brand.
Elon Musk on cutting hours at DOGE
“Starting probably in next month, in May, my time allocation to DOGE will drop significantly,” he said on a conference call where Tesla’s earnings took centre stage. Even though he maintained that the work tied to DOGE is mostly done, he still expects to spend one or two days a week “critical work” at the department “for as long as the president would like me to do so and as long as it is useful.”
His political involvement, however, isn’t the only bane to Tesla. With Trump tariffs in focus, China’s retaliation is also expected to hit the company like a wrecking ball. Elon Musk’s Tesla was left with no choice but to stop accepting orders from mainland customers for Model S and Model X. The Associated Press also reported that Tesla’s Model Y and Model 3, which it makes for the Chinese market at its Shanghai factory, are bound to impacted as well.
Officials, analysts on Elon Musk’s political work tarnishing Tesla’s appeal
While official word on Musk’s potential DOGE exit (though the 130-day cap is scheduled for May 30) has yet to roll out, Wedbush Securities analyst Dan Ives previously said he “need to leave the government, take a major step back on DOGE and get back to being CEO of Tesla full-time,” according to Bloomberg. “Tesla is Musk and Musk is Tesla….and anyone that thinks the brand damage Musk has inflicted is not a real thing, spend some time speaking to car buyers in the U.S., Europe, and Asia. You will think differently after those discussions.”
Tesla CFO also confirmed how Musk’s role in the Trump administration has affected the company: “The negative impact of vandalism and unwarranted hostility towards our brand and our people had an impact in certain markets. Despite this, we were able to sell out legacy Model Y.”
Analysts, on the other hand, are convinced that even Elon Musk’s DOGE exit would not reinstate Tesla’s glory. “Musk’s personal brand has been permanently tarnished by his political activities in the last several months, and exiting DOGE won’t change that,” said Vital Knowledge’s Adam Crisafulli in a Tuesday research note. “On top of all this, the stock remains very expensive.”
