Tesla CEO Elon Musk has announced plans to significantly reduce his role in the U.S. government’s Department for Government Efficiency (Doge), following a sharp decline in the electric carmaker’s performance. The billionaire entrepreneur, who has led the newly created advisory body since last year, said he would cut back his involvement to just one or two days per week starting next month.
The decision comes after Tesla reported a troubling 70% drop in profits and a 20% fall in car sales for the first quarter of the year compared to the same period in 2024. Investor confidence has also waned, with the company’s shares plunging 37% so far this year, although they saw a slight rebound in after-hours trading.
Musk acknowledged that political backlash over his deepening ties with President Donald Trump and his controversial role in Doge has contributed to global boycotts of Tesla vehicles. The tech mogul donated over $250 million to Trump’s re-election campaign, a move that has fueled both support and outrage. Musk, however, defended his role in Doge, calling it “critical” and claiming that the bulk of the work in streamlining government spending was “mostly done.”
Tesla’s struggles are compounded by external pressures, including Trump’s escalating trade war with China. While Tesla assembles most of its U.S.-market vehicles domestically, many parts are sourced from China. The company warned that “rapidly evolving trade policy” could hurt its supply chain and impact demand.
Musk has also faced internal friction with key figures in the Trump administration. He recently lashed out at trade adviser Peter Navarro, calling him a “moron” after Navarro criticized Musk’s role in Tesla, describing him as more of a “car assembler” than a manufacturer.
Despite the gloom, Tesla expressed optimism about the role of artificial intelligence in its future growth, although investor skepticism remains. Former Tesla executive Georg Ell remarked that if Musk refocused on his core companies, attention might return to Tesla’s product quality. For now, however, Musk’s political entanglements and Tesla’s financial downturn remain closely intertwined.
