Elon Musk announced he will sharply reduce his involvement in the Trump administration’s Department of Government Efficiency starting next month, shifting focus back to Tesla amid mounting investor pressure and falling sales.
Tesla CEO Elon Musk announced on Tuesday that he will significantly reduce the amount of time he spends on work related to the Trump administration, beginning next month, in order to dedicate more attention to his various companies, particularly Tesla.
Musk has been at the forefront of the Department of Government Efficiency (DOGE), a controversial initiative within the Trump administration focused on cutting federal jobs. His involvement has sparked widespread protests and acts of vandalism at Tesla showrooms, while shareholders have increasingly voiced concerns that Musk’s government commitments have distracted him from addressing Tesla’s declining sales.
“With much of the heavy lifting to establish the DOGE team and collaborate with the government to restore financial discipline now completed, I’ll be scaling back,” Musk said during an earnings call with analysts. However, he clarified that he still expects to allocate around 40% of his time to the initiative.
Tesla stock, which had already gained 4% in after-hours trading ahead of the earnings call, surged further to a 5.5% increase following Musk’s comments. Despite the jump, Tesla’s share price remains nearly 50% below its December peak.
In its post-market earnings report, Tesla posted stronger-than-expected profits in its core automotive business and confirmed it was on track to begin production of a more affordable electric vehicle. However, the company warned it would reevaluate its growth outlook in the next quarter, citing uncertainty tied to evolving global trade policies and shifting political dynamics that could affect consumer demand.
Trade tensions with China added further complications. Tesla has paused some component imports from China in response to the U.S. raising tariffs on Chinese goods to 145%. In retaliation, China imposed its own tariffs, prompting Tesla to suspend new Model S and Model X orders in the Chinese market.
Musk reiterated his stance in favor of lower tariffs and acknowledged the broader challenges facing the auto industry. “Tesla isn’t immune to changes in macroeconomic demand,” he said. “When people are uncertain about the economy, they tend to delay major purchases like cars.”
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