Elon Musk Will Reduce Government Involvement Due to Tesla Sales Declining and Growing Investor Pressure

Elon Musk has stated that following a decline in profits and criticism for his political involvement, he will return his attention to Tesla.

After Tesla announced a sharp decline in sales and earnings for the first quarter of this year, Elon Musk, the company’s CEO, promised to “significantly” reduce his position in the US government.

Putting the richest man in the world at the center of reducing US expenditure and employment, Musk has been leading the Department for Government Efficiency (Doge), a recently established advisory agency, since last year.

After being accused of diverting his attention from Tesla, Musk stated that his “time allocation to Doge” would “drop significantly” starting next month, allowing him to devote only one or two days a week to it.

Around the world, his political activity has led to demonstrations and Tesla automobile boycotts.

Musk and other temporary government workers are typically only allowed to work 130 days a year, which, if counting from the day of President Donald Trump’s inauguration, will end late next month.

However, it’s unclear when Musk, who gave Trump over a quarter of a billion dollars to help him win reelection, will formally stand aside.

Musk would be retained by Trump “as long as I could keep him,” he declared earlier this month.

According to the tech CEO, he will now “be allocating far more of my time to Tesla,” but he did not say that he would quit the Trump administration entirely. He described the job as “critical” and promised to remain “as long as the president would like me to do so and as long as it’s useful.”

Compared to the same period last year, Tesla’s car sales for the first three months of this year plummeted by 20%, while the company’s profits dropped by more than 70%, the company announced on Tuesday.

While declining to provide a growth estimate, the company cautioned investors that the suffering would not end and stated that “changing political sentiment” might significantly harm demand.

Musk attributed the Tesla car boycott to those who would “try to attack me and the Doge team.”

At the conclusion of business on Tuesday, the company’s stock had lost around 37% of its value this year. After the results were announced, they increased by almost 5% in post-hours trading.

Tesla also suffered greatly as a result of Trump’s tariffs on China. Despite having US-assembled cars in its domestic market, Tesla relies heavily on Chinese-made parts. “Rapidly evolving trade policy” might increase prices and harm the company’s supply chain, it said.

In the short term, “this dynamic, along with shifting political sentiment, could have a meaningful impact on demand for our products,” according to Tesla’s quarterly report.

Musk and other Trump administration officials, like as trade adviser Peter Navarro, have disagreed on trade.

Musk stated on Tuesday that he believed Tesla was the automaker least impacted by tariffs because to its localized supply chains in China, Europe, and North America, but that tariffs were “still tough on a company where margins are low.”

“I’ll keep pushing for lower tariffs instead of higher ones, but that’s all I can do,” he stated.

Because of Navarro’s remarks on Tesla earlier this month, he referred to him as a “moron.”

Musk was described by Navarro as “not a car manufacturer,” but rather as a “car assembler, in many cases.”

“I think people will focus once again on the quality of the product and experiences if the multibillionaire focuses on the companies where he is extraordinary,” said Georg Ell, who was director for Western Europe at Tesla and knew Musk.

“I believe Elon is a fairly single-minded person who does not surround himself with a wide range of opinions to challenge his thinking,” Mr. Ell, who is currently the CEO of the translation software company Phrase, continued.

Tesla claimed that artificial intelligence would help the company develop in the future, but investors haven’t been fooled by such claims before.

AJ Bell investment analyst Dan Coatsworth described expectations as “rock-bottom” after the company revealed earlier this month that car sales for the quarter had dropped 13% to the lowest level in three years.

The company faces intense competition, Mr. Coatsworth stated, adding that there are dangers associated with the possible disruption of global supply chains brought on by Trump’s trade war.

He claimed that Tesla’s issues were becoming worse.