Elon Musk, the CEO of Tesla, has announced that he will reduce his role in the U.S. government’s Department of Government Efficiency (DOGE). This decision comes after Tesla reported a significant drop in profits and sales for early 2025, raising concerns about the company’s future.
Musk stated that he will now dedicate only one to two days a week to DOGE starting next month, though he won’t step down completely. He described his government work as “important” and plans to continue as long as it’s deemed useful. Temporary government employees like Musk are usually limited to working 130 days a year, with his time set to expire late next month. However, it remains unclear when he will fully step aside.(BBC)
On Tuesday, Tesla revealed a 20% decrease in car sales during the first quarter compared to the same period last year, alongside a profit decline of over 70%. The company cautioned investors that challenges might persist, choosing not to provide a growth forecast and warning that “changing political sentiment” could significantly affect demand. Musk attributed the boycott of Tesla vehicles to individuals targeting him and the DOGE team. Tesla’s stock had already lost about 37% of its value this year by Tuesday’s market close but saw a recovery of over 5% in after-hours trading.
Tesla’s troubles extend beyond Musk’s involvement in politics. The company faces high costs due to U.S. tariffs on Chinese-made parts, which have disrupted its supply chain. Although Tesla assembles its cars in the U.S., it relies heavily on Chinese-made components. Musk acknowledged that the tariffs remain “tough” on Tesla, which already operates with low profit margins.
Competition from other electric vehicle companies has also intensified. Tesla’s aging product lineup is struggling to compete with newer and more innovative cars entering the market. Additionally, political shifts and global economic uncertainties are further impacting demand for Tesla vehicles, exacerbating the company’s challenges.
The company’s stock value has dropped 37% this year, although it saw a slight increase following Musk’s announcement. Tesla has warned investors that further difficulties could lie ahead, as shifting political sentiments may reduce demand for its products.
Tesla reported $19.3bn (£14.5bn) in total revenue for the quarter, marking a 9% year-on-year decline, according to its latest figures. This fell short of the $21.1bn expected by analysts and came as the company reduced prices in an attempt to attract buyers.
Trump-era tariffs on China have also weighed heavily on Tesla. While the vehicles Tesla sells domestically are assembled in the U.S., many parts are sourced from China. The company noted that “rapidly evolving trade policy” could disrupt its supply chain and further raise costs.
“This dynamic, along with changing political sentiment, could have a meaningful impact on demand for our products in the near-term,” Tesla’s quarterly update stated.(BBC)
Musk has pledged to refocus on Tesla, aiming to turn the company’s fortunes around. Plans are underway to launch new, more affordable cars and a robotaxi service later this year. The company is also exploring artificial intelligence as a potential driver of future growth.(www.gbnews.com)
