Tesla CEO Elon Musk has announced a step back from his high-profile role in Donald Trump’s administration, as mounting political backlash and dismal first-quarter results force a recalibration at the electric carmaker.
The move comes amid one of Tesla’s most challenging quarters in recent years, with automotive revenue down 20% and profits plunging over 70% year-on-year. The company’s revenue for Q1 2025 hit $19.3 billion.
Once hailed as a visionary technologist, Musk has increasingly become a polarizing political figure — especially after taking the helm of Trump’s Department of Government Efficiency (Doge) and contributing over $250 million to Trump’s re-election campaign. That involvement, Tesla now concedes, has cost the brand more than just goodwill, it’s impacted sales, consumer sentiment and market confidence.
In its quarterly update, Tesla cited “changing political sentiment” and “rapidly evolving trade policy” as key headwinds, particularly as Trump’s tariffs on Chinese imports disrupt the company’s global supply chain. While Tesla builds cars domestically, it heavily depends on parts sourced from China, now a point of vulnerability in Trump’s protectionist trade war.
Musk acknowledged the storm, admitting his government commitments have distracted from Tesla operations. He vowed to reduce his Doge workload to “one to two days per week” starting next month, promising to refocus on Tesla’s challenges. Still, he defended the initiative as “critical,” claiming the task of “getting the government house in order is mostly done.”
Meanwhile, global protests and boycott calls have intensified, with Tesla now caught in a politically charged crossfire that’s proving costly both in reputation and revenue.
Tesla is attempting to rekindle demand through aggressive price cuts and touting future AI-driven growth, but analysts remain skeptical. With global EV rivals closing the tech gap and car deliveries dropping 13%, the lowest in three years, Tesla’s once-unquestioned dominance is eroding.
Musk’s public feud with Trump trade adviser Peter Navarro, whom he recently branded a “moron,” adds further drama to Tesla’s already volatile narrative.