Elon Musk Reduces DOGE Role to Refocus on Tesla; Stock Soars 7%​

Tesla shares climbed 7% on Wednesday after CEO Elon Musk told investors he’s cutting back on government work to focus more on Tesla. Musk said that starting in May, he’ll spend far less time with the Department of Government Efficiency (DOGE)—a group he’s been involved with—and shift his attention back to leading Tesla.

This news gave investors some hope, even though Tesla just reported a disappointing quarter.

Earnings Miss Expectations as Revenue and Profit Drop

Tesla’s first-quarter results came in weaker than expected. The company brought in $19.34 billion in revenue, falling short of Wall Street's estimate of $21.43 billion and down from $21.3 billion a year ago. Profits also dropped sharply, with earnings per share coming in at $0.27 compared to the expected $0.44. That’s a 40% decline from last year.

Tesla pointed to trade tensions and shifting global policies as reasons for the weaker performance, saying it’s getting harder to manage supply chains and production costs. The company also warned that changing political climates could affect demand for its cars in the short term.

Affordable EV Still Planned, But Growth Forecast on Hold

Despite the challenges, Tesla says it’s still on track to launch a more affordable electric vehicle in the first half of 2025, and it’s aiming to start mass-producing its Robotaxi in 2026. However, the company said it will revisit its guidance for 2025 when it reports second-quarter results. For now, Tesla has pulled back its long-term growth forecast.

This comes as questions continue to swirl about delays in Tesla’s lower-cost vehicle plans. While reports suggested the launch might be pushed back, Tesla executives didn’t confirm or deny that. Instead, they emphasized the company is focused on making its cars more affordable.

Sales Slide as Rivals Gain Ground

Tesla’s deliveries took a hit in Q1, with 336,681 vehicles delivered—the lowest number since mid-2022. Meanwhile, other automakers are seeing a sales boost, especially as buyers try to get ahead of new U.S. tariffs on imported vehicles that took effect in early April.

Tesla is also losing ground to rivals like China’s BYD, which has been gaining market share overseas. In Europe, Tesla’s vehicle registrations dropped in March, signaling more trouble in key markets.

Musk’s Politics Stir Controversy, Affect Brand Image

Beyond the numbers, Musk’s political activity is adding pressure. His public support for Donald Trump and other conservative leaders in the U.S. and Europe has sparked backlash. Tesla showrooms have seen protests, and some Tesla vehicles have even been vandalized. These incidents are adding to the strain on the brand, especially among customers who once saw Tesla as a tech-forward, neutral company.

Robotaxi Testing Starts in Austin This Summer

Musk said Tesla will begin testing its Robotaxi service in Austin starting in June. He claimed Tesla’s self-driving cars will be far cheaper than competitors like Waymo, which rely on expensive sensors. Musk says keeping costs low is a major focus for the company as it works on next-generation vehicles.

Despite the weak quarter, investors seem encouraged by Musk’s pledge to return his full attention to Tesla. Whether that will be enough to get the company back on track remains to be seen—but for now, the markets are responding positively.

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