Tesla Profits Plunge Over Elon Musk’s DOGE Role And Political Backlash

Tesla reported a sharp decline in profits and sales for the first quarter of 2025, with net income down 71% compared to the same period last year. Auto revenue declined 20%, and total revenue decreased by 9%. The company also delivered 50,000 fewer vehicles than the same period last year, marking its lowest quarterly sales in nearly three years. Amid mounting criticism over his involvement in the Trump administration’s Department of Government Efficiency (DOGE), Elon Musk announced he will cut back his time at the agency starting in May. “My time allocation to DOGE will drop significantly,” Elon Musk told investors during the latest earnings call. He had been facing backlash from shareholders and the public for spending too much time on political ventures instead of focusing on Tesla.

Political Ties and Public Protests

Elon Musk’s involvement with DOGE and his political activities—particularly his support for far-right parties in Europe—have reportedly damaged Tesla’s brand. Protests have erupted outside Tesla showrooms, and several facilities have been vandalised. While Musk claimed these critics had “benefitted from the waste and fraud,” he has been fighting through DOGE; analysts say the damage to Tesla’s reputation has contributed significantly to its sales slump.

Trade Wars Add to Tesla’s Woes

The ongoing global trade war, fueled by new Trump tariffs on auto parts, has further clouded Tesla’s outlook. While the company builds cars in the U.S. and is less exposed to Trump tariffs on imported vehicles, it still relies heavily on imported parts. Musk distanced himself from trade policy decisions, stating, “The tariff decision is entirely up to the President,” but reiterated his long-standing support for lower tariffs.

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Stock Volatility and Future Outlook

Despite the disappointing financial results, Tesla shares climbed 4% in after-hours trading following Musk’s announcement that he will return his focus to the company from DOGE. Still, the stock is down 50% from its record high in December, having lost all post-election gains. Tesla reaffirmed plans to release more affordable models by mid-2025 and launch its long-awaited driverless robotaxi service later this year.

Competition and Market Share Pressure

Tesla’s problems aren’t just political or trade-related. EV competition continues to intensify—especially from Chinese automaker BYD, which has recently outpaced Tesla in quarterly electric vehicle (EV) sales multiple times. With China being Tesla’s second-largest market, the growing threat from local competitors could put Tesla’s global leadership at risk.

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Musk’s Vision for a “Bright Future”

Despite the setbacks, Elon Musk maintained an optimistic tone. He emphasised the company’s long-term innovations in autonomous vehicles and robotics, promising they would usher in an era of “sustainable abundance for all.” He also insisted that Tesla’s current problems aren’t as severe as in the past, calling the company’s future “brighter than ever.”