April 23, 2025 — Tesla CEO Elon Musk has announced he will significantly reduce his involvement in Donald Trump’s administration after the electric car maker reported a sharp drop in profits and revenue for the first quarter of 2025. Tesla’s financials revealed a 20% decline in automotive revenue compared to the same period last year, while overall profits plummeted by more than 70%. The disappointing results were accompanied by a 9% drop in total revenue to $19.3 billion, falling short of analysts’ expectations.
Musk’s growing presence in the White House, particularly his leadership of Trump’s Department of Government Efficiency (DOGE) initiative, has triggered public backlash and sparked global protests and boycotts of Tesla vehicles. Critics say his political alignment has distracted from company priorities. In response to the mounting criticism, Musk said he will start spending only one to two days per week on government-related work starting next month, stating he would continue the role “as long as it’s useful and the president wants me involved.” He insisted that the DOGE team had “mostly finished” its core mission of cutting federal spending and reducing government workforce.
Tesla warned investors that shifting political sentiment could continue to impact sales. The company cited increasing political polarization, Trump-era tariffs on Chinese goods, and Musk’s controversial statements as key factors affecting consumer demand. Although Musk argued that Tesla was less affected by tariffs due to its localized supply chains in North America, Europe, and China, he acknowledged that global trade tensions posed risks—particularly for an industry where profit margins are already tight.
Tensions within the Trump administration also surfaced, with Musk recently calling trade adviser Peter Navarro a “moron” after Navarro downplayed Tesla’s role in manufacturing.
Despite Tesla’s recent AI initiatives, which Musk claims will drive long-term growth, investor confidence has remained shaky. The company’s stock has dropped about 37% this year, though shares rose 5% in after-hours trading after the earnings announcement.
Dan Coatsworth, an investment analyst at AJ Bell, said expectations for Tesla were already low following a 13% drop in quarterly vehicle sales—the lowest in three years. He warned that rising global competition and the threat of further supply chain disruption from ongoing trade conflicts could add more pressure on Tesla in the coming months.
“Tesla is under serious pressure from multiple fronts,” Coatsworth said.
