Musk Scales Back Gov’t Role Amid Tesla’s Financial Downturn

By Staff, Agencies

Tesla CEO Elon Musk has announced a reduction in his political involvement within the Trump administration, citing Tesla’s deteriorating financial performance as a key reason for the shift.

The decision comes after the company reported a steep 70% drop in quarterly profits and a 20% decline in automotive revenue compared to the same period in 2024.

Musk acknowledged that his political engagement, particularly his leadership of the Department of Government Efficiency [DOGE]—a Trump-era initiative to slash federal spending and reduce the government workforce—had diverted attention away from managing Tesla. In response to mounting pressure, Musk stated that beginning next month, he will limit his time with DOGE to just one or two days per week, allowing him to focus more fully on his company.

The first quarter of 2025 was one of Tesla’s weakest since 2022, with total revenues falling to $21.3 billion—marking a 9% year-on-year decrease and falling short of Wall Street expectations.

Tesla attributed the disappointing figures to a range of factors, including aggressive price cuts, global trade tensions, and a more challenging geopolitical environment. Vehicle deliveries dropped by 13% year-on-year, with the company delivering 336,681 vehicles during the quarter.

Despite setbacks in its core automotive division, Tesla saw a bright spot in its energy generation and storage business, which posted a 67% increase in revenue. However, other challenges—including factory retooling, currency volatility, and supply chain bottlenecks—have continued to weigh on operations. Notably, the ongoing US-China trade war and new tariffs on key components have disrupted Tesla’s global supply lines.

Musk’s political affiliations have also triggered a wave of backlash that has affected the company’s brand image. Protests have erupted outside Tesla showrooms in the US, Europe and Australia, with demonstrators criticizing Musk’s alignment with Germany’s far-right AfD party and his advisory role in the Trump administration.

Incidents of vandalism and customer hostility have been reported, with Tesla’s CFO admitting that the political fallout has harmed the company’s reputation and sales. Musk has alleged that some demonstrators were paid agitators, although no evidence has been presented to support this claim.

Looking forward, Tesla remains committed to its long-term technology goals, including the launch of its AI-driven Robotaxi service and the humanoid robot, Optimus. However, development delays—particularly with Optimus—have been attributed to difficulties in securing key components such as magnets, which have been affected by Chinese restrictions on rare earth exports.

Tesla’s stock has declined by approximately 37% in 2025, reflecting investor concerns over weak earnings, increased competition in the EV sector, and persistent logistical challenges. Nevertheless, the stock saw a modest rebound of over 5% in after-hours trading following Musk’s announcement, though analysts warn that the road ahead remains uncertain.