Lily Jamarielport from the San Franciscoaters
Donald Trump and Elon Musk (left) outside the White House (File photo)
Tesla boss Elon Musk says he will cut Donald Trump’s role in the administration after a plunge in the company’s profits and revenues over the first three months of the year.
Sales fell and electric car makers faced backlash as masks became political fixtures in the White House.
On Tuesday, the company reported a 20% decline in auto revenue in the first quarter of 2025, but profits fell more than 70% compared to the same period last year.
The company warned investors that the pain could continue and refused to provide growth forecasts, saying that “changes in political sentiment” could significantly hurt demand.
The recent DIP of the company’s fortune came amid protests over masks’ role in Trump’s new administration.
The technology boss has donated more than $505 million to Trump’s reelection. He also leads Trump’s Government Efficiency (DOGE) initiative to reduce federal spending and reduce government workforce.
Musk said his “time allocation to Doge” will “deep down significantly” from next month. He only spends one or two days a week on government issues, he said.
His political involvement sparked protests and boycotts from Tesla all over the world.
He denounced the “blowback” of people who “try to attack me and the Doge team.” However, he called his work at Doge “critical” and said “mostly there is a process of sorting out the homes under rule.”
Tesla brought in $19.3 billion (£14.5 billion) in quarterly revenue, down 9% year-on-year, according to new figures. This comes as the company lowered prices to plead to buyers, below $21.1 billion, analysts expect.
The company said Trump’s tariffs on China are also heaviering Tesla. The vehicles Tesla sells in-home markets are assembled in the US, but rely on many parts made in China. According to the company, “a rapidly evolving trade policy” could damage supply chains and increase costs.
“This dynamic, along with changing political sentiment, could have a meaningful impact on the demand for our products in the near future,” says Tesla’s quarterly update.
Musk clashed over trade with other Trump administration figures, including trade adviser Peter Navarro.
Reuters
The recent reversal of the company’s fate comes amid protests over Musk’s role in the Trump administration
Earlier this month, he called Navarro a “stupid” over the comments he made about Tesla. Navarro said the masks are “not car manufacturers” and “often car assemblers.”
George Elle, who knows masks and is Tesla’s Western Europe director, said that a large number of people in the BBC’s today’s programme “If he’s focusing on an extraordinary company, I think people will refocus on the quality of their products and experience.”
“I don’t think Elon is a person who is dressed in very diverse opinions to challenge his own ideas. He is a rather single-minded individual,” Elle added.
On Tuesday, Musk considered Tesla to be the automotive company least affected by tariffs due to localized supply chains in North America, Europe and China, but he added that tariffs are “still tough for companies with low margins.”
“I continue to defend lower tariffs, not tariffs, but that’s all I can do,” he said Tuesday.
Tesla said artificial intelligence would contribute to future growth, but investors were not convinced by such discussions in the past.
The company’s shares had dumped about 37% of this year’s value at the time of market closure Tuesday. They rose more than 5% in after-hours trading following the results.
AJ Bell investment analyst Dan Coatsworth was called “Rock-Bottom” after the company said earlier this month that the number of cars sold in three years had fallen to a lowest level.
Cotsworth said the company faces fierce competition and warns that potential disruption in global supply chains as a result of Trump’s trade war also created risk.
“The Tesla problems are growing,” he said.
