The electric car giant Tesla is hitting a wall, and its CEO, Elon Musk, is making waves with a promise to dial back his controversial side gig. On April 22, Tesla reported a gut-punching 71% drop in profits for the first quarter of 2025, down to $409 million from $1.39 billion a year ago. Revenue took a hit too, sliding 9% to $19.3 billion, falling short of Wall Street’s hopes for $21.45 billion. The news sent ripples through the market, though Tesla’s stock managed a 4% bump in after-hours trading after Musk dropped a bombshell: he’s planning to step back from his high-profile role at the Department of Government Efficiency, or DOGE, starting next month.
Musk, never one to shy from the spotlight, has been juggling his Tesla duties with a stint advising the Trump administration on slashing federal spending. His work at DOGE, a temporary gig capped at 130 days as a special government employee, has sparked protests outside Tesla showrooms and even vandalism at some facilities. Critics point to Musk’s political moves—especially his support for far-right parties in Europe—as a drag on Tesla’s brand, particularly among liberal-leaning EV buyers. The company delivered 336,681 vehicles in the first quarter, a 13% drop from last year and its worst sales slump in nearly three years. Meanwhile, competitors like China’s BYD are eating Tesla’s lunch, outpacing it in quarterly EV sales and threatening its full-year lead.
During an earnings call on April 22, Musk addressed the firestorm head-on. He’s scaling back DOGE to just one or two days a week come May, insisting the heavy lifting there is “mostly done.” The billionaire defended his government work as a crusade against “waste and fraud,” brushing off claims it’s tanking Tesla’s sales. Economic jitters and trade wars, he argued, are the real culprits behind the company’s woes. Yet the numbers tell a tougher story: while Tesla’s sales cratered, overall EV sales climbed 7% in the same period, with rivals gaining ground.
Tesla’s not just battling Musk’s political baggage. The company faces stiffer competition, especially in China, the world’s biggest EV market. Plans for a cheaper Model Y, set to roll out by mid-2025, are in motion, but production delays could slow the comeback. Musk doubled down on Tesla’s future, hyping autonomous driving and humanoid robots as game-changers. He’s banking on driverless “Cybercab” vehicles hitting Austin streets in June and millions of self-driving Teslas on roads by late 2026. Investors, though, remain wary—past promises of full autonomy have yet to materialize.
Musk’s DOGE tenure, set to wrap by May 30, has been a lightning rod. Protests have flared from Kansas City to London, with demonstrators slamming his role in pushing government cuts. Tesla’s stock, already down nearly 40% over the past year, reflects the strain. Still, the company generated $2.2 billion in operating cash flow, a bright spot amid the gloom. Plans for a paid robotaxi service and a new, stripped-down Model Y are on deck, but with tariffs looming and consumer confidence shaky, Tesla’s road ahead looks bumpy.
The earnings report, filed on April 22, laid bare the challenges: automotive revenue fell 20%, and earnings per share of 27 cents missed expectations of 43 cents. Musk’s pivot back to Tesla may steady the ship, but the clock’s ticking. For now, the company that once seemed unstoppable is grappling with a stark reality: even visionaries like Musk can’t outrun a perfect storm.