Musk to Scale Back DOGE Role Amid Tesla Profit Plunge

Tesla’s Profit Freefall Sparks Leadership Shift
Tesla’s first quarter of 2025 delivered a financial shock, with profits plummeting by 71% to $409 million and revenue dropping 9% to $19.3 billion, far below Wall Street expectations. This downturn comes as CEO Elon Musk faces mounting criticism for his high-profile involvement with the Trump administration’s Department of Government Efficiency (DOGE), a role many investors and analysts believe has distracted him from Tesla’s core business. The company’s quarterly report also highlighted a 13% year-over-year decline in vehicle deliveries, marking Tesla’s worst sales performance in nearly three years 2 4 5.

Musk Announces Reduced Commitment to DOGE
In response to the disappointing results and investor pressure, Musk announced during a Tuesday investor call that he will “significantly” scale back his role at DOGE, reducing his commitment to just one or two days per week starting in May. Musk stated that the major work of establishing DOGE is now complete and that he will be dedicating much more of his time to Tesla moving forward. However, he stopped short of fully exiting his government advisory role, citing its ongoing importance 1 3 4.

Political Fallout and Consumer Backlash
Musk’s political activities—especially his leadership of DOGE, which has overseen controversial federal job cuts—have sparked protests and consumer boycotts, particularly in the US and Europe. His open support for far-right political parties in Germany and the UK has further alienated potential Tesla buyers in those markets. Surveys indicate that about half of Americans now hold an unfavorable view of Musk, and Tesla dealerships have reported incidents of vandalism and protests linked to his government involvement 2 3 5.

Trade Policy and Market Uncertainty
Tesla’s struggles are compounded by broader economic and political headwinds. The company cited “rapidly evolving trade policy” and new tariffs imposed by President Trump as factors disrupting supply chains and increasing costs, even though Tesla manufactures its vehicles domestically. The uncertainty surrounding global trade and shifting political sentiment has forced Tesla to withhold its usual growth outlook for the rest of the year 2 3 4.

Investor Reaction and Brand Impact
Analysts view Musk’s decision to step back from DOGE as a critical move for Tesla’s future. Dan Ives of Wedbush Securities called it “a big step in the right direction,” reflecting investor sentiment that Musk needs to recommit to Tesla’s leadership. Following Musk’s announcement, Tesla’s shares rose nearly 5% in after-hours trading, suggesting cautious optimism that the company can recover if Musk refocuses on its core mission 4 5.

AIgnite Opinion
Musk’s decision to reduce his government role is a pragmatic response to investor and market pressures, but it also underscores the risks of overextending even the most visionary leaders. Tesla’s recent performance shows how closely a company’s fortunes can be tied to its CEO’s public image and priorities. While Musk’s government work may have been well-intentioned, the backlash and brand erosion—especially among key EV buyers—demonstrate the importance of focus and strategic alignment. If Musk can channel his energy back into Tesla’s innovation pipeline, especially in areas like autonomous driving and robotics, the company may yet regain its growth trajectory and repair its reputation.

Key Takeaways

• Tesla’s Q1 2025 profits dropped 71%, with revenue down 9% and deliveries falling 13% year-over-year.
• Elon Musk will reduce his DOGE government role to one or two days per week to focus more on Tesla.
• Musk’s political activities and leadership of DOGE have led to protests, consumer boycotts, and brand damage, especially in the US and Europe.
• Trade policy uncertainty and new tariffs have further complicated Tesla’s business outlook.
• Investors and analysts view Musk’s renewed focus on Tesla as essential for the company’s recovery, with shares rising after the announcement.