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Tesla profits plunge amid Musk backlash Musk signals 'significantly' stepping back from Doge as Tesla profits plunge
(about 1 hour later)
The recent reversal of the company's fortunes comes amid outcry over Musk's role in the Trump administration Tesla boss Elon Musk said he will cut back his role in the Trump administration as the company's latest profits and revenues showed a plunge during the beginning of the year.
Tesla's profits and automotive revenues plunged at the beginning of the year, as sales slumped and the brand faced backlash against boss Elon Musk's political activities. Sales have slumped, and the brand has faced backlash as Musk became a political fixture in the new White House administration.
On Tuesday, the firm reported a 20% drop in automotive revenue in the first three months of 2025, compared to the same period last year, while profits fell more than 70%.
The company warned investors that the pain could continue, declining to offer a growth forecast while saying "changing political sentiment" could meaningfully hurt demand.The company warned investors that the pain could continue, declining to offer a growth forecast while saying "changing political sentiment" could meaningfully hurt demand.
The acknowledgement came as the firm reported a 20% drop in automotive revenue in the first three months of 2025 compared to the same period last year, while profits fell more than 70%. The recent dip in the company's fortunes comes amid outcry over Musk's role in President Donald Trump's new administration, which Musk acknowledged has taken his focus off the company.
The recent reversal of the company's fortunes comes amid outcry over Musk's role in the Trump administration, which he has acknowledged has taken his focus off the company. Musk contributed more than a quarter of a billion dollars to Trump's reelection. He also leads Trump's Department of Government Efficiency (DOGE) initiative to cut federal spending and slash the government workforce.
Musk contributed more than a quarter of a billion dollars towards President Donald Trump's reelection campaign. Musk's political involvement has sparked protests and boycotts of Tesla around the world.
He has also headed up Trump's Department of Government Efficiency (DOGE) initiative to cut federal spending and slash the government workforce. He said the "blowback" comes from people who "will try to attack me and the Doge team". But he called his work at Doge "critical" and said "getting the government house in order is mostly done."
Musk's controversial political involvement has sparked protests and boycotts of Tesla around the world. Tesla brought in $19.3bn (£14.5bn) in total revenue in the quarter, down 9% year-on-year, according to the new numbers. That was less than the $21.1bn expected by analysts, and came as the company cut prices in a bid to woo buyers.
Tesla on Tuesday said it had brought in $19.3bn (£14.5bn) in total revenue in the quarter, down 9% year-on-year. Musk's "time allocation to Doge will drop significantly" starting in May, he said, adding that he will spend only 1 to 2 days per week on government matters "as long as the president would like me to do so and as long as it's useful."
That was less than the $21.1bn expected by analysts, and came as the company cut prices in a bid to woo buyers. Trump's tariffs on China also weighed heavily on Tesla, the company indicated. Although the vehicles Tesla sells in its home market are assembled in the US, it depends on many parts made in China. "Rapidly evolving trade policy" could hurt its supply chain and raise costs, according to the company.
Trump's tariffs on China also weighed heavily on Tesla, the company indicated. "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 said.
Although the vehicles Tesla sells in its home market are assembled in the US, it depends on many parts made in China. Musk has clashed on trade with other Trump administration figures, including trade adviser Peter Navarro.
It said "rapidly evolving trade policy" could hurt its supply chain and raise costs. The recent reversal of the company's fortunes comes amid outcry over Musk's role in the Trump administration
"This dynamic, along with changing political sentiment, could have a meaningful impact on demand for our products in the near-term," it said. Earlier this month, he called Navarro a "moron" over comments Navarro made about Tesla. Navarro had said Musk is "not a car manufacturer. He's a car assembler, in many cases."
Tesla said artificial intelligence would contribute to future growth. On Tuesday, Musk said he thinks Tesla is the car company least affected by tariffs because of its localized supply chains in North America, Europe and China, but he added that "tariffs are still tough on a company where margins are low."
But investors have been unconvinced by such arguments in the past. "I'll continue to advocate for lower tariffs rather than higher tariffs but that's all I can do," he said on Tuesday.
Shares in the company had shed about 37% of their value this year, as of market close on Tuesday. They were steady in after-hours trading following the results. Tesla said artificial intelligence would contribute to future growth, though investors have been unconvinced by such arguments in the past.
Dan Coatsworth, investment analyst at AJ Bell, said expectations were "rock-bottom" after the company said earlier this month that the number of cars sold in the quarter had fallen 13%, to their lowest level in three years. Shares in the company shed about 37% of their value this year, as of market close Tuesday. They were steady in after-hours trading following the results.
He said the firm was facing fierce competition and warned that potential disruption to global supply chains as a result of Trump's trade war also creates risks. Dan Coatsworth, investment analyst at AJ Bell, called expectations "rock-bottom" after the company said earlier this month that the number of cars sold in the quarter fell 13%, to the lowest level in three years.
The firm faces fierce competition, Mr Coatsworth said, warning that potential disruption to global supply chains as a result of Trump's trade war also creates risks.
"Tesla's problems are mounting," he said."Tesla's problems are mounting," he said.