Elon Musk will significantly reduce his involvement in Donald Trump’s administration after Tesla suffered a sharp financial downturn, with profits plunging over 70% and revenue down 9% in the first quarter of 2025.
The electric carmaker reported a 20% year-on-year decline in automotive revenue, attributing the slump partly to Musk’s political entanglements. His leadership of Trump’s Department of Government Efficiency (Doge) and his $250 million campaign donation have drawn global protests and spurred boycotts against Tesla.
“Starting next month, my time allocation to Doge will drop significantly,” Musk said, committing just one to two days a week to government duties. While defending the initiative as “critical,” he admitted political distractions had impacted his focus on Tesla.
Investor confidence has waned amid this political storm. Tesla’s quarterly revenue of $19.3 billion missed expectations of $21.1 billion, as the firm slashed vehicle prices to stimulate demand. Trump’s escalating trade war with China, a key source of Tesla components, added further strain.
Musk’s clashes with other administration officials — including calling trade adviser Peter Navarro a “moron” — have fueled public controversy. Meanwhile, industry voices urge Musk to refocus. “When he concentrates on what he does best, Tesla thrives,” said Georg Ell, former Tesla Europe director.
Despite a 37% stock decline this year, Tesla shares rose 5% in after-hours trading, with some optimism resting on future AI initiatives. Still, analysts warn that supply chain volatility and deepening political blowback could keep Tesla under pressure.
“Tesla’s problems are mounting,” said AJ Bell’s Dan Coatsworth. “And the fallout from Musk’s political ventures is far from over.”
