Tesla (TSLA, Financials) reported weak Q1 results Tuesday, with auto sales down 20% year over year and net income dropping 71%, as CEO Elon Musk said he plans to scale back his role in the Trump administration's government reform program, DOGE, starting in May.
Revenue fell short of Wall Street expectations, and Tesla shares have now plunged over 40% year to date, according to CNBC. Musk, who created DOGE after backing Donald Trump's 2024 re-election bid with nearly $300 million, said during the earnings call he would reduce his time on federal restructuring from full-time to just a couple of days a week, though he plans to remain involved as long as needed.
The company cited external challenges including heightened competition from Chinese EV makers, protests in the U.S. and Europe, and brand headwinds tied to Musk's political affiliations. Protestors have targeted Tesla for its perceived alignment with far-right politics, including Musk's support of Germany's AfD party. Musk claimed without evidence that many protesters were “recipients of wasteful largesse.”
Tesla's auto division generated less revenue than the same quarter last year, while the company's overall market cap has shrunk by around $600 billion since DOGE's inception. Meanwhile, DOGE claims to have cut $160 billion in federal spending—figures that have been disputed and partially retracted.
The administration confirmed that Musk holds a “special government employee” designation, allowing reduced disclosure obligations. DOGE-led cuts have reportedly affected agencies that regulate Musk's companies, including the Securities and Exchange Commission and the Federal Aviation Administration.
Investors will be watching for Tesla's next earnings and further clarification on Musk's future time allocation as he navigates federal duties and a shrinking EV market share.
See Tesla's insider trades: https://www.gurufocus.com/stock/TSLA/insider
