Elon Musk has announced that he will reduce his involvement with Donald Trump’s Department of Government Efficiency (DOGE) starting in May, opting to dedicate more time to Tesla. This decision follows a decline in Tesla’s first-quarter profits, attributed in part to President Trump’s tariffs.
As a special government employee, Musk’s role at DOGE was limited to 130 days, with a focus on cutting federal spending. However, the austerity measures implemented, including job cuts, have sparked controversy and led to protests and attacks on Tesla showrooms. President Trump even went as far as labeling the perpetrators as «terrorists.»
Tesla reported a 71% drop in quarterly profits to $409 million from $1.39 billion in the first quarter of 2024. Revenues also fell below expectations, decreasing by 9% to $19.3 billion between January and March. The company’s stock value has plummeted by over 50% since reaching a peak in mid-December, a decline attributed to various factors such as trade war tariffs, competition from Chinese electric vehicle manufacturers, and concerns over Musk’s ability to manage the company effectively.
Shareholders have expressed concerns about Musk’s leadership at Tesla, particularly given his multiple roles as CEO of SpaceX and owner of X (formerly Twitter). Additionally, early Tesla investor Ross Gerber remarked in a recent interview that Musk has become too divisive and lost focus, with no clear signs of improvement at the company despite anticipated updates in affordable car production and driverless technology.
Tesla’s financial results indicate that work on an affordable car is progressing towards production in the first half of 2025, with plans for the self-driving robotaxi, Cybercab, to launch in 2026. The company’s outlook statement highlights the uncertainties posed by global trade policies, particularly the impact of tariffs on the automotive and energy supply chains.
While Tesla manufactures cars in the US, additional taxes on imported car parts from factories in China and Germany under the tariff regime have added to the company’s challenges. The outlook for growth this year depends on various factors, including the pace of autonomy efforts and production ramp-up at Tesla’s factories.
For more details, you can watch videos featuring Elon Musk and industry experts discussing the future of Tesla and the challenges facing the company.
Image Source: AP
Caption: Donald Trump hired Elon Musk to help cut federal spending, but Tesla has faced a public backlash. Pic: AP
Video Source: Sky News
Video Caption: ‘Elon Musk has got to go’ / ‘I think Tesla needs a new CEO’
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