Elon Musk makes shock claim after reacting to 70% drop in Tesla profits
Elon Musk appears to be back in the driver seat of Tesla following his surprise departure from DOGE, yet a shocking claim at the most recent earnings call has led some to question his focus following a 70% decline in profits.
While the success of Tesla is largely what allowed Elon Musk to become the richest man in the world, the electric car manufacturer has suffered significantly over the last few months as Musk's attention has been drawn elsewhere.
Much of his time so far this year has been spent in his new government role as head of the Department of Government Efficiency (DOGE), where he and a team working 120 hours a week have been tasked with finding $2 trillion in savings from the federal budget.
This has made Musk an incredibly controversial and broadly unpopular figure for many across the nation, as the actions of his department have led to significant job losses and funding cuts for key government departments.
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As a consequence, Tesla's brand and stock market value have plummeted, as worldwide protests and vandalism have targeted the car company, leaving it in a worrying financial situation comparatively.
Tesla's stock market price has almost halved since the start of the year, and sales declines worldwide indicate that Musk's popularity (or lack thereof) is directly impacting the company's image.
This was most apparent in Tesla's most recent earnings call, where it was revealed that overall revenue fell 9% since last quarter with revenue from automobile sales in particular dropping by a staggering 20%.
Shockingly, Tesla's overall net profit was revealed to have declined by 71% year-on-year, showing the extent of their decline in line with Musk's move into politics.
While Musk is due to leave his role as head of DOGE by the end of next month as a consequence of his status as a special government employee, it comes at a good time for Tesla as experts have indicated that his increased presence could help the company avoid a 'Code Red Situation'.
Yet Musk has defended his governmental work in a shocking claim during the earnings call, as reported by CNN Business:
"I think the right thing to do is fight the waste and fraud and try to get the country back on the right track," Musk asserted. "If the ship of America goes down, Tesla will go with it."
Certainly at this point in time, one of the things keeping Tesla afloat is the government-issued regulatory credits that Tesla earns through their electric vehicle sales.
Targets introduced by the Biden administration forced car manufacturers to either sell a certain portion of their automotive stock as electric, or buy the equivalent numbers from companies in excess - which Tesla as an all-electric manufacturer has plenty of.
Regulatory credits made by $600,000,000 of Tesla's most recent financial income statement, which is $200 million more than their overall net profit and was likely a key reason why they managed to end up in the black.
While some might see Musk's alignment of America and Tesla's fate as a worrying foresight, the market has responded favorably to his decision to step away from DOGE, despite an otherwise poor financial report.
Tesla's stock price has increase 9% in the last day, and 23% in the last five days, indicating an increased confidence from investors - although it remains 25% lower when compared to year-to-date totals.