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After Tesla shares plunge, Elon Musk announces reduction of his role in the Trump administration
2025-04-23 12:24:43 / BOTA
Tesla CEO Elon Musk has said he will reduce his role in Donald Trump's administration after the company's profits and revenue fell in the first three months of the year. Sales fell and the electric carmaker faced a backlash after Musk became a political figure in the White House.
On Tuesday, the firm reported a 20% drop in automotive revenue in the first quarter of 2025 compared to the same period last year, while profits fell more than 70%. The company warned investors that the “pain” could continue, without offering a growth forecast.
The company's recent decline in fortunes came amid an outcry over Musk's role in the new Trump administration, which he has acknowledged has taken his focus away from the company. The tech chief contributed more than a quarter of a billion dollars to Trump's reelection campaign. He also leads Trump's Department of Government Efficiency (DoGE) initiative to cut federal spending and shrink the government workforce.
Musk said the time he spends on DOGE will be significantly reduced starting next month. He would, he said, spend only one to two days a week on government matters "for as long as the president wants me to do it and for as long as it's useful."
His political involvement has sparked protests and boycotts of Tesla around the world. He blamed the strike on people trying to attack him and the Doge team. But he called his work at Doge "critical" and said that "the government's house-keeping has been largely done."
Tesla brought in $19.3 billion (£14.5 billion) in total revenue in the quarter, down 9% year-on-year, according to new figures. That was less than the $21.1 billion analysts had expected and came after the company cut prices in a bid to attract buyers.
Trump's tariffs on China have also hit Tesla hard, the company said. Although the vehicles Tesla sells in its home market are assembled in the U.S., it relies on many parts made in China. "The rapidly evolving trade policy" could hurt its supply chain and increase costs, the company said.
Musk has clashed on trade with other Trump administration figures, including trade adviser Peter Navarro. Earlier this month, he called Navarro "crazy" for comments he made about Tesla. Navarro had said Musk was "not a car manufacturer" but a "car assembler, in many cases."
Georg Ell, who knew Musk and was director of Western Europe at Tesla, told the BBC 's Today programme that if the multibillionaire "focuses on the companies where he is exceptional, I think people will once again focus on product quality and experiences."
“I think Elon is not someone who surrounds himself with a great variety of thoughts to challenge his thinking, he is a fairly solitary individual,” added Mr. Ell, who is now the chief executive of translation software firm Phrase.
On Tuesday, Musk said he thought Tesla was the car company least affected by the tariffs because of its supply chains localized in North America, Europe and China, but he added that the tariffs were “still tough on a company where margins are low.” Tesla said artificial intelligence will contribute to future growth, although investors have not been convinced by such arguments in the past.
The company’s shares had lost about 37% of their value this year since the market closed on Tuesday. They rose more than 5% in after-hours trading following the results. Dan Coatsworth, investment analyst at AJ Bell, called expectations “low” after the company said earlier this month that the number of cars sold in the quarter had fallen 13% to the lowest level in three years. The firm faces stiff competition, Coatsworth said, warning that potential disruptions to global supply chains as a result of Trump’s trade war also posed risks.
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