Elon Musk, the CEO of Tesla, has announced plans to reduce his involvement in Donald Trump’s administration following a sharp fall in Tesla’s profits.
The decision was prompted by investor pressure and global consumer backlash against Musk’s relationship with the former U.S. president, particularly his leadership of the Department of Government Efficiency (DOGE), a Trump administration initiative aimed at reducing federal spending and cutting the government workforce.
On Tuesday, April 22, 2025, Tesla reported a 20% decline in revenue and a 71% decrease in net profit for the first quarter of the year, compared to the same period in 2024.
The company earned $19.3 billion in revenue, which was below the expected $21.1 billion, and car deliveries declined by 13%, marking the lowest performance in the past three years.
Musk, who contributed over $250 million to Trump’s re-election campaign, acknowledged the controversy surrounding his political involvement.
In a statement made during Tesla’s post-earnings call, he said he would reduce his time spent on government matters to just one or two days a week starting next month, “as long as the president allows.”
He added that although the DOGE work is “critical,” it has become the target of “relentless political attacks” that have harmed his company’s reputation and sales.
Tesla has faced boycotts and protests globally, with critics accusing Musk of prioritizing political ambitions over company leadership.
Trade tensions have further complicated Tesla’s situation. Trump’s new tariffs on Chinese imports have impacted the company’s supply chain, particularly for parts produced in China and assembled in the U.S., resulting in increased manufacturing costs and reduced competitiveness.
In Tesla’s earnings report, the company warned that “rapid changes in trade policy” and political dynamics could further impact demand.
Tensions within the Trump administration also became public earlier this month when Musk called White House trade advisor Peter Navarro a “moron” after Navarro dismissed Tesla as merely a “car assembler.”
Georg Ell, a former Tesla executive in Western Europe, commented on the situation during an interview with the BBC, saying that Musk needs to focus more on Tesla and surround himself with advisors who can challenge his views. “If Elon focuses on the companies he knows best, people will once again pay attention to product quality and experience,” he said.
Despite the grim financial results, Tesla shares rose by over 7% in after-hours trading after Musk’s announcement. Dan Ives, an analyst at Wedbush Securities and long-time Tesla supporter, described the earnings call as a “turning point” for the company. In a note to investors, Ives wrote that the move signaled an end to what he called a “dark chapter” of political volatility. He added, “Tesla got back its biggest asset… Musk.”
Tesla also revealed updates to its product pipeline. The robotaxi project, called the Cybercab, along with the Tesla Semi, remains under construction, while the Roadster has shifted into the design development phase. Musk stated that Tesla’s robotaxis could start significantly contributing to revenue by mid-2026 and that thousands of Optimus robots would be deployed in Tesla factories by the end of the year.
While analysts warn that challenges such as tariffs, global competition, and supply chain disruptions
