Tesla CEO Elon Musk has announced plans to scale back his role in the Trump administration amid sharp financial setbacks for the electric car company. In Q1 2025, Tesla saw a 20% drop in automotive revenue and a 70% plunge in profits, citing declining vehicle sales, global tariffs, and growing backlash over Musk’s political engagements.
Musk currently heads the Department of Government Efficiency (DOGE), a Trump administration initiative aimed at cutting federal spending. However, due to mounting pressure on Tesla’s business, Musk said he would reduce his time commitment to DOGE to one or two days per week, allowing him to refocus on Tesla.
The company’s revenue fell to $18.3 billion—a 9% year-over-year decline—and vehicle deliveries dropped 13%, marking Tesla’s weakest quarter since 2022. Meanwhile, backlash over Musk’s support for controversial political figures and policies, including protests and acts of vandalism, has hurt the brand’s image, especially in key markets like Europe and Australia.
On a more positive note, revenue from Tesla’s energy generation and storage segment grew by 67%, and its stock rebounded 5% in after-hours trading, despite a 37% decline overall in 2025.
Musk emphasized that Tesla’s future remains tied to its AI-driven projects, including Robotaxi and the humanoid robot Optimus. However, these initiatives have been delayed due to supply chain issues, particularly China’s restrictions on rare earth exports.
Analysts remain cautious, warning that intensifying EV competition, geopolitical risks, and continued brand damage could compound Tesla’s troubles in the coming quarters.
