Tesla CEO and Head of DOGE Elon Musk stated on Tuesday that he would be spending less time sucking up to the Trump administration and focus on Tesla. This move came after Tesla’s net income fell by 71% after a decline in vehicle deliveries. Apart from backlash against Musk’s political interference, Tesla is struggling with shifting trade policies and stiff competition from Chinese manufacturing.
Elon Musk announced during a Tesla earnings call on Tuesday, “Starting next month, my time allocation to DOGE will drop significantly.” He added, “There are some challenges, but I remain extremely optimistic about the future of the company.” However, Musk defended his work with DOGE, claiming that it was necessary to cut back on “waste and fraud” in the government.
Tesla Faces Financial and Brand Crisis Amid Political Fallout
Tesla Q1 earnings fell below Wall Street expectations, sending investors into a flurry. Tesla reported $409 million in net income, a 71% decline compared to Q1 2024. Adjusted EPS was 27 cents, below investor’s expectations of 39 cents. The only reason the company was in green was because it sold $595 million in zero-emission tax credits.
Tesla suffered a significant decline in vehicle sales in Q1 2025. Tesla only delivered about 337,000 EVs, making it the worst quarter in over two years. The year-on-year sales drop by 13%, making it Tesla’s first-ever YoY sales decline.
Tesla, as a brand, has taken a massive hit because of Musk’s role within the Trump administration. Tesla vehicles have been labeled “Nazi cars,” driving away many environmentally conscious consumers—Tesla’s core customer base. Elon Musk is seen as the face of everything that is wrong with Trump’s administration, fueling the Tesla boycott.
Many owners are also selling their Teslas, as the brand is now seen as an endorsement of Musk’s political views. Singer Sheryl Crow also shared a video on Instagram, waving goodbye to her Tesla, captioned, “Time to choose who you align with.”
Tariffs Fuel Supply Chain Struggles and Tensions with the White House
Trump’s tariff has also been a bane for Tesla and other car manufacturers, which caused a rift between Musk and the White House. Musk took a jab at Trump’s senior trade advisor Peter Navarro calling him a “moron” on social media for his opinion on tariff impact on “car assemblers.”
Tesla imports substantial parts from China, including battery cells, automotive glass, and printed circuit boards. These tariffs have increased the production costs of Tesla vehicles and disrupted some of their supply chain. China has also slapped the USA with 125% tariffs that have cut Tesla sales in China amidst growing domestic competition.
Despite the fall in net earnings, Tesla stock recovered more than 5% in after-hours trading after ending Tuesday up 4.6%.
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