Elon Musk has announced plans to "significantly" reduce his involvement in the US government's advisory operations following a major dip in Tesla’s profits and sales at the beginning of the year.
Since last year, Musk has headed the Department for Government Efficiency (Doge), a new advisory body focused on reducing federal spending and workforce, placing the billionaire at the forefront of major political decision-making, reports BBC.
However, amid growing concerns over his attention to Tesla, Musk said his "time allocation to Doge" would "drop significantly" starting next month. He indicated he would limit his work on the initiative to just one or two days per week.
His political activities have triggered international backlash, including protests and calls to boycott Tesla vehicles.
Typically, temporary federal advisors like Musk are restricted to 130 working days annually, a limit he is nearing if calculated from President Donald Trump's inauguration date. Despite that, it remains uncertain when Musk, who donated over $250 million to Trump’s re-election bid, will officially step down.
Trump recently stated he would retain Musk “as long as I could keep him”.
Musk reiterated his commitment to Tesla, saying he would now "be allocating far more of my time to Tesla." Still, he stopped short of a full exit from government duties, calling the Doge project “critical” and saying he would remain involved “as long as the president would like me to do so and as long as it's useful”.
Tesla reported a 20% year-on-year decline in vehicle sales for the first quarter, with profits dropping over 70%. The company refrained from providing a growth outlook, warning that “changing political sentiment” might significantly affect demand.
Musk attributed the backlash to those seeking to “attack me and the Doge team.”
Tesla shares have fallen around 37% this year, though they saw a post-earnings recovery of over 5% in after-hours trading on Tuesday.
The firm is also grappling with the effects of Trump’s tariffs on China. Although Tesla’s US-market vehicles are assembled domestically, many components are sourced from China. The company warned that “rapidly evolving trade policy” could disrupt its supply chain and increase costs.
“This dynamic, along with changing political sentiment, could have a meaningful impact on demand for our products in the near-term,” the company stated in its quarterly report.
Musk has had disagreements over trade policy with Trump officials, including trade adviser Peter Navarro. On Tuesday, Musk claimed Tesla is among the least affected carmakers due to localized supply chains across North America, Europe, and China, but acknowledged tariffs still pose challenges. “I’ll continue to advocate for lower tariffs rather than higher tariffs but that’s all I can do,” he said.
Earlier in the month, Musk called Navarro a “moron” following the latter’s remarks dismissing Tesla as merely a “car assembler, in many cases.”
Georg Ell, a former Tesla executive and current CEO of translation software firm Phrase, told BBC’s Today programme, “If the multi-billionaire focuses on the companies where he is extraordinary, I think people will focus once again on the quality of the product and experiences.” He added, “I think Elon is not someone who surrounds himself with a great diversity of opinion to challenge his thinking, he’s a pretty single-minded individual.”
Tesla expressed optimism about artificial intelligence driving future growth, though investors remain skeptical.
Dan Coatsworth, an investment analyst at AJ Bell, said expectations were at “rock-bottom,” citing a 13% fall in car sales—Tesla’s lowest quarterly figure in three years. He also pointed to intensifying competition and potential global supply chain disruptions stemming from Trump’s trade actions.
“Tesla’s problems are mounting,” Coatsworth said.