Elon Musk has declared his intention to significantly reduce his involvement with the Department of Government Efficiency (DOGE) beginning in May 2025. This decision comes in response to mounting pressures from Tesla investors and the company’s recent financial challenges.
According to the company’s earnings report, Tesla’s net income dropped to $409 million from $1.4 billion in the first quarter of 2024. This resulted in a 71% decline in quarterly profits. Elon Musk has stated that he will avoid the U.S. DOGE Service next month and concentrate on Tesla instead.
The massive electric vehicle (EV) company also suffered a 9% drop in revenue, coming in at $19.3 billion. This was far less than the $21.45 billion that Wall Street had predicted. Along with a 13% decline in vehicle deliveries to 336,681 units, the poor financial results make this Tesla’s poorest quarter since 2022.
Elon Musk, the company’s CEO, ascribed the difficulties to a mix of changing trade regulations, fierce rivalry, and economic uncertainty; nevertheless, analysts and investors believe that Musk’s contentious political participation is a major contributing factor to the company’s difficulties.
During Tesla’s earnings call, Musk, who has been a key advisor to President Donald Trump through the Department of Government Efficiency (DOGE), declared that he will drastically reduce his engagement with DOGE beginning in May.
“My time allocation to DOGE will drop significantly,” Musk said, noting he expects to dedicate only one or two days a week to the role for the remainder of Trump’s term.
This move follows months of criticism against Musk’s high-profile efforts to decrease federal expenditure and destroy tens of thousands of government jobs. All of which have spurred protests, boycotts, and vandalism targeting Tesla plants across the United States and Europe.
Tesla’s stock, down 45% year-to-date, has lost nearly $585 billion in market value since January. After Musk’s announcement to limit his DOGE role, shares surged 5.3% in after-hours trading. This signals hope that his concentration on the company may stabilize the firm. Analysts are still wary, though. Longtime Tesla booster Dan Ives of Wedbush Securities reduced his target stock price from $550 to $315. He named the company a “global political symbol” engulfed in a “brand crisis tornado.”
Musk acknowledged the detrimental effects of his political involvement on Tesla’s performance during the company’s most recent earnings call. According to him, his political affiliations have produced “a few bumps in the road” for Tesla, including public protests. He made the controversial allegation that the government is fraudulently funding them, although he has yet to provide any proof.
Musk denied allegations of brand harm, blaming consumer anxiety and macroeconomic causes for sales drops. He claimed that demonstrators were motivated by “waste and fraud” and stood to lose, while defending his work with DOGE.
Musk intends to reduce his government job to one or two days per week as part of his goal to put Tesla back into the forefront of his mind. He emphasized that he had essentially finished the fundamental work to create DOGE and that he now plans to devote more time to tackling Tesla’s urgent issues, such as a sharp decline in sales.
Musk’s shift in priorities has raised concerns about DOGE’s future and its impact on Dogecoin.
Although Musk’s exit from DOGE might result in less political meddling, it might also mean that the agency is less effective and has less of an effect on cryptocurrency prices.
In the meantime, Dogecoin’s price remains volatile, influenced by Musk’s statements and actions. Investors will be closely monitoring how Musk’s reduced involvement with DOGE affects both the department’s initiatives and Dogecoin’s market performance.
