Elon Musk to step back from doge role as Tesla faces 71% profit drop, amid White House ties
Elon Musk has announced he will scale back his involvement in Doge starting May 2025, as Tesla faces a dramatic downturn in its financial performance. Musk, the CEO of both Tesla and Spacex, made the revelation on an investor call, citing that the work needed to “get the government’s financial house in order” is largely complete. The decision comes in the wake of a disastrous quarter for Tesla, with the company reporting a 71% drop in profits and a 9% decline in revenue year-over-year.
Tesla’s first-quarter earnings for 2025 showed the company brought in $19.3 billion in revenue, falling well short of Wall Street’s expectations of $21.45 billion. The company also posted earnings per share of 27 cents, missing the anticipated 43 cents. With vehicle deliveries plummeting by 13%, Tesla experienced its worst quarter since 2022, delivering just 336,681 vehicles. This drop in deliveries was further exacerbated by ongoing protests and vandalism against the company, with some Tesla dealerships facing public demonstrations over Musk’s controversial White House role.
Despite these dire numbers, Musk expressed optimism during the call, stating, “The future for Tesla is better than ever,” and emphasising the company’s long-term vision of “sustainable abundance.” He reiterated that Tesla’s ambition to roll out fully autonomous vehicles, including self-driving cars and a Robotaxi service, would help the company regain its footing. Musk predicted that these innovations would be a cornerstone of Tesla’s future, with fully autonomous vehicles expected to hit U.S. roads by the end of 2025.
However, analysts are raising alarms about the long-term effects of Musk’s dual roles at Tesla and Doge, particularly in relation to his involvement in the White House. Musk’s time in government, especially his advisory role in the so-called “Department of Government Efficiency,” has been linked to a branding crisis for Tesla. According to experts, his involvement in both the White House and Doge has distracted him from his duties as Tesla’s CEO, leading to strategic missteps and financial losses.
In response to mounting pressure, Musk has indicated that he will devote only one to two days per week to Doge, after his tenure as a special government employee ends on May 30. Despite this reduction in his time allocation to Doge, Musk remains committed to what he views as “critical work” for the project, at least for as long as the president requires his services.
However, some analysts believe that Musk’s departure from the White House role will be essential for Tesla’s recovery. Wedbush Securities noted that if Musk returns to Tesla as CEO full-time, the company could regain its strategic vision and begin to reverse the damage caused by his political engagements. Still, the firm warned that if Musk stays in the White House, Tesla may continue to face brand damage, further complicating the company’s financial recovery.
Tesla’s challenges are compounded by external economic factors. Musk blamed the dip in demand on broader macroeconomic trends, citing economic uncertainty as a key driver behind consumer hesitation in making major capital purchases like vehicles. However, analysts are unconvinced, with many pointing to the impact of Musk’s political distractions on the company’s ability to meet expectations.
Despite these setbacks, Musk’s optimistic outlook on Tesla’s autonomous vehicle future remains central to the company’s long-term strategy. As Tesla’s struggles continue, all eyes are on Musk’s next move and whether his return to Tesla’s leadership can restore investor confidence.
