Tesla (TSLA+1.13%) CEO Elon Musk said late Tuesday that he would take a big step back from his work leading the Department of Government Efficiency, cheering investors who have worried he is distracted and sending the stock up despite a brutal quarterly earnings report.
“I think starting probably in next month, May, my time allocation to DOGE will drop significantly,” Musk said during Tesla’s earnings conference call. “I’ll have to continue doing it for I think the remainder of the President’s term just to make sure the waste and fraud that we stopped does not come roaring back, which it will do if it has the chance. So I think I’ll continue to spend, you know, a day or two per week on government matters for as long as the president would like me to do so and as long as it is useful.
“But starting next month,” he added, “I’ll be allocating far more of my time to Tesla now that the major work of establishing the Department of Government Efficiency is done.”
Tesla stock rose almost 7% on Wednesday morning. The shares are still down about 32% so far this year.
The EV maker reported late Tuesday that net income sank 71%, and its earnings were a double-miss in both adjusted earnings-per-share and revenue. Total auto revenue fell 20% year-over-year during the period.
Tesla reported $19.3 billion in revenue, which was down 9% compared with the same period last year ($21.3 billion). Net income plummeted to $409 million, or 12 cents a share, from $1.39 billion, or 41 cents a share, a year earlier.
Tesla said the drop in profits was a result of factory retooling needed to make a revamped version of its popular Model Y SUV, along with price cuts and sales incentives that put the brakes on the company’s revenue.
But the company also acknowledged the effect of political backlash to Musk’s work for President Donald Trump, saying that “changing political sentiment” could contribute to “a meaningful impact on demand for our products in the near-term.”
Trump has imposed 25% tariffs on auto imports — on top of 10% universal tariffs and tariffs on auto parts still to come. While Tesla manufactures the cars it sells in the U.S. in Texas and California, it relies on other countries for parts (Mexico supplies more than 20% of the automaker’s parts).
Tesla left a return-to-growth forecast out of its earnings report, saying it would revisit its 2025 guidance in a Q2 update.
“It is difficult to measure the impacts of shifting global trade policy on the automotive and energy supply chains, our cost structure and demand for durable goods and related services,” Tesla said in its earnings release. “While we are making prudent investments that will set up both our vehicle and energy businesses for growth, the rate of growth this year will depend on a variety of factors, including the rate of acceleration of our autonomy efforts, production ramp at our factories and the broader macroeconomic environment.”
—Shannon Carroll contributed to this article.
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