- Elon Musk announced he will significantly reduce his involvement with the Department of Government Efficiency (DOGE) starting in May to refocus on Tesla after the company reported a 71 percent drop in quarterly profits.
- DOGE, established in January 2025, aims to audit agencies like the IRS and cut $2 trillion in federal spending. Musk, serving as co-chair, is subject to a 130-day federal ethics cap, requiring his exit by late May – though President Donald Trump hopes he stays longer.
- Musk's government role has sparked legal scrutiny, protests and Tesla dealership vandalism. Meanwhile, Tesla's Q1 2025 earnings plunged, with automotive revenue down 20 percent and deliveries falling 13 percent due to weakened demand.
- Tesla's stock dropped 37 percent in 2025 amid supply-chain disruptions and Trump's 25 percent auto tariffs. Musk admitted his DOGE work contributed to Tesla's struggles.
- Analysts like Dan Coatsworth cite "rock-bottom" expectations for Tesla due to EV battery shortages and political uncertainty. Former Tesla executive Georg Ell criticized Musk's leadership style, urging him to focus on Tesla's core business.
Tesla CEO Elon Musk has announced that he will "significantly" scale back his involvement with the Department of Government Efficiency (DOGE) starting in May to refocus on Tesla after the automaker reported a 71 percent drop in quarterly profits.
DOGE, established via executive order in January, was tasked with auditing agencies like the Internal Revenue Service (IRS) and cutting at least $2 trillion in federal spending over seven years – a key Trump 2024 campaign pledge. Musk, appointed last year to lead DOGE, has been in continued collaboration with the Trump administration to eliminate federal waste and fraud. Under federal ethics rules, Musk's role as a special government employee caps his service at 130 days. He must exit by late May, but President Donald Trump expects him to stay "a few months" longer.
However, the high-profile government role of Musk has drawn legal scrutiny, protests and even vandalism at Tesla dealerships.
The automotive revenue of the automaker dropped to 20 percent year-over-year to $13.9 billion, with deliveries falling 13 percent to 336,681 vehicles. Tesla's stock has plummeted 37 percent this year, though it remains up 67 percent compared to early 2024. Tesla blamed weakening demand on "uncertainty about U.S. tariffs and changing political sentiment." Trump's 25 percent auto import tariffs have also disrupted supply chains, raising costs despite Tesla's continued U.S. production in California and Texas.
"This is a very expensive job," Musk said during the recent town hall, regarding his White House involvement. "Tesla stock and the stock of everyone who holds Tesla has gone… roughly in half. I mean, it's a big deal." (Related: Tesla suspends shipment of critical components from China due to escalating tariffs.)
Musk acknowledged that his DOGE association has fueled backlash, so he announced that he will be allocating more time to Tesla.
"Starting next month, I'll be allocating far more of my time to Tesla," Musk said among his investors, adding that the "major work of establishing the Department of Government Efficiency is done." The statement came as Tesla released its first-quarter 2025 financials, showing net income of $409 million on $19.3 billion in revenue – a sharp decline from the same period last year.
Analyst: Tesla's problems are mounting
Tesla is already facing multiple challenges, including declining vehicle deliveries and investor skepticism.
"Tesla's problems are mounting," said Dan Coatsworth, an investment analyst at AJ Bell, a British public limited company that provides online investment platforms and stockbroker services. He even declared expectations for the company at "rock-bottom" amid EV battery shortages, supply-chain disruptions and Trump's tariffs on Chinese imports.
Meanwhile, former Tesla Director Georg Ell for Western Europe, now CEO of Phrase, questioned Musk's leadership style. "I think Elon is not someone who surrounds himself with a great diversity of opinion to challenge his thinking, he's a pretty single-minded individual," he said, suggesting that if Musk only "focuses on the companies where he is extraordinary, people will focus once again on the quality of the product and experiences."
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