Featured Image Credit: Bloomberg / Contributor / Getty
Elon Musk has responded after Tesla's profits take a huge hit.
The electric car maker saw a major slump in profits and revenues during the first three months of 2025.
On Tuesday (22 April), the firm reported that its automotive revenue dropped by 20% compared to the same time last year, and profits fell over 70%.
During this time, company boss Musk became President Trump's Senior Advisor, leading the administration's Department of Government Efficiency (DOGE) initiative to cut federal spending and reduce the workforce.
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Now, the tech billionaire says he will cut back his role in the White House after admitting that his political commitments had taken his focus off the company.
Starting next month, Musk said his 'time allocation to DOGE' would 'drop significantly.'
Instead, he would spend one to two days per week on his government role 'as long as the president would like me to do so and as long as it's useful.'
On the DOGE website, the department claims to have saved the government around $160 billion through cuts.
But those numbers were later challenged, with some larger portions of savings being quietly removed from the program’s website.
Meanwhile, during the same period, Tesla lost around $600 billion in market value. According to the latest earnings report, the US carmaker brought in $19.3 billion (£14.5 billion) in total revenue for the first quarter. This is down 9% from last year's time and falls short of the $21.1 billion analysts were expecting.
Although Tesla pointed to artificial intelligence as a key driver of future growth, it wasn't enough to convince investors.
Additionally, the automotive company has mentioned slashing car prices to attract buyers, but it didn't offset the decline.
In response to investors, the company chose not to give a growth forecast, adding that 'changing political sentiment' could hurt demand even more.
Musk's political participation, donating over $250 million to Trump’s re-election campaign and showcasing Tesla vehicles as a political statement, has also resulted in worldwide protests and boycotts against the brand.
The 53-year-old blamed the 'blowback' on people who would 'try to attack me and the DOGE team,' adding that his work at DOGE is 'critical'.
Furthermore, another problem weighing heavily on Tesla's cap is the new US tariffs on China. While Tesla builds its US vehicles domestically, it still relies heavily on parts manufactured in China. The company explained that a 'rapidly evolving trade policy' could disrupt the supply chain and increase costs.
Musk reportedly believed Tesla would be the least affected car company when it came to tariffs, given its localised supply chains in North America.
"I'll continue to advocate for lower tariffs rather than higher tariffs but that's all I can do," the SpaceX founder and CEO stated last Tuesday.
