Tesla Profits Plunge; Musk Shifts Focus Away From DOGE
Tesla reported first-quarter revenue of $19.34 billion, far below analysts’ consensus of $21.11 billion. Automotive revenue slipped by roughly one-fifth year-on-year, and net profit tumbled seventy-one per cent, marking the steepest quarterly decline since the early pandemic period. Deliveries fell by thirteen per cent after production stoppages for model refreshes, while automotive gross margin narrowed to 12.5 per cent, just above the 11.8 per cent feared by analysts.
During the earnings call, chief executive Elon Musk announced he will “significantly” scale back the time he spends leading the White House Department of Government Efficiency (DOGE) from early May, limiting himself to “a day or two a week” and redirecting attention to Tesla. The billionaire said the core work of establishing DOGE is “mostly done” and acknowledged that investor concern over his divided focus had become a distraction.
BREAKING: Elon Musk says his time allocation to DOGE will drop significantly starting next month and that he will devote far more time to @Tesla.
"The large slug of work necessary to get the DOGE team in place is mostly done; I'll continue to spend 1-2 days per week as long as…
Management blamed part of the revenue shortfall on surging US and China tariff friction, which has forced Tesla to pause certain component imports and warn of “meaningful” demand risks if trade barriers widen further. At the same time, vandalism at showrooms and a consumer backlash linked to Musk’s polarising political profile have weighed on US and European sales, reversing Tesla’s once-commanding electric-vehicle market share.
Investor reaction and market moves
Despite the gloomy figures, Frankfurt-listed Tesla shares rose six and a half per cent on Wednesday and after-hours New York trading added about five per cent. Traders credited the modest bounce to margins coming in above worst-case expectations and to relief that Musk will recommit to day-to-day oversight. Several analysts, however, cautioned that a single quarter of thinner margins “doesn’t end the downward spiral” and said sustainable recovery depends on volume growth and clearer policy visibility.
Tesla reiterated that production of a cheaper variant based on existing Model 3 and Model Y platforms is scheduled to begin in the first half of 2025, though executives signalled the ramp-up may be slower than first envisaged. The firm also maintained a June launch date for its robotaxi pilot in Austin, emphasising that expanding autonomous services could offset soft passenger-car demand. Still, the company declined to reaffirm its earlier target of returning to overall sales growth this year, citing “uncertain trade policy” and “macro demand” as wild cards.
Summary
Tesla’s sharp first-quarter miss underscores how exposed the carmaker has become to trade friction, political controversy and intensifying competition. Musk’s decision to scale back his government advisory role may soothe some shareholder anxiety, yet regaining lost momentum will hinge on successful delivery of lower-priced models, disciplined cost control and a calmer geopolitical climate. With tariffs, regulation and consumer sentiment all in flux, the coming quarters will test whether renewed executive focus can translate into a durable turnaround.
