Tesla Profits Tumble as Musk Shifts Focus Back to the Company and Away from Government Role

Tesla’s latest earnings report sent shockwaves through investors, revealing a major slump in profits and sales — the worst the company has seen in years. At the center of the storm: Elon Musk’s controversial government role and a trade climate riddled with uncertainty.

But now, Musk says he’s coming home.

During Tuesday’s earnings call, Elon Musk announced he’ll be significantly cutting back on his time with the Department of Government Efficiency (DOGE) starting in May, devoting just “a day or two a week” to the role.

“Starting next month, my time allocation to DOGE will drop significantly,” Musk told investors, signaling a renewed focus on Tesla.

Musk defended his tenure at DOGE, saying his efforts to eliminate “waste and fraud” were necessary for the country’s long-term stability — and indirectly, for Tesla’s success.

“If the ship of America goes down, Tesla will go with it,” Musk said. “I think the right thing to do is fight the waste and fraud and try to get the country back on the right track.”

Tesla’s numbers painted a grim picture:

• Revenue down 9%
• Automotive revenue down 20%
• Adjusted income down 39%
• Net income plunged 71% year-over-year

Tesla also confirmed a massive sales decline, with 50,000 fewer vehicles delivered in Q1 — the largest drop in its history and the lowest quarterly sales in nearly three years.

This downturn comes after years of explosive growth that once propelled Tesla to become the world’s most valuable automaker.

Compounding the pain is growing trade uncertainty. Despite building its U.S. cars domestically, Tesla still relies on imported parts — leaving it exposed to the new tariffs imposed by the Trump administration.

“It is difficult to measure the impacts of shifting global trade policy,” the company said, acknowledging that it may need to revise its guidance if the trade war drags on.

Musk, while avoiding direct criticism of Trump, reiterated his stance: “Lower tariffs are a good idea for prosperity… I’ll continue to advocate for that.”

Musk’s political involvement hasn’t just made headlines — it’s also sparked protests, showroom vandalism, and backlash overseas. Critics have tied Tesla’s plummeting sales, particularly in Europe, to Musk’s alignment with far-right political parties and his high-profile DOGE role.

While Musk denied that his politics have damaged the brand, he offered no proof to support his claim that protesters were only upset because DOGE cut off their “fraudulent” income streams.

Despite the controversy, Musk insisted that the foundation of DOGE is now laid, allowing him to return his focus to Tesla.

Investors seemed encouraged — Tesla stock rose 4% in after-hours trading on the news of Musk’s return.

Musk shrugged off concerns about brand damage and said sales issues are tied more to broader economic woes than anything specific to Tesla.

“Absent from macro issues, we don’t see any reduction in demand,” he said, maintaining that the long-term outlook for Tesla remains strong.

He promised big things ahead, from autonomous robotaxis launching as soon as this spring to affordable new EV models “by the end of June.” But critics note that Tesla hasn’t shown any production capacity for those affordable models in 2025.

Musk also teased Tesla’s ongoing work in humanoid robotics and self-driving tech — areas where he has made big promises before, but little has materialized so far.

“This is a happy future,” Musk said. “A period of sustainable abundance for all.”

Even with Musk’s return, Tesla faces stiff headwinds. Competition in the EV space has never been fiercer — especially from Chinese giant BYD, which once again edged out Tesla in quarterly EV sales.

Tesla still leads in annual global sales, but that could change by 2025 if current trends continue.

China remains a crucial market — Tesla’s second-largest after the U.S. — but specific figures from China were noticeably absent in this week’s report.

Tesla shares have been on a wild ride. After doubling post-election on hopes of EV-friendly policies, the stock has now lost all of those gains — down 50% from its December peak.

With Musk stepping back from politics and vowing to double down on Tesla, investors are hopeful the company can stabilize and regain momentum. But with trade tensions simmering, political distractions lingering, and competitors gaining ground, the road ahead won’t be smooth.