Tesla Profits Plunge but Elon Musk Blames Economy, Says DOGE Commitment Will ‘Drop Significantly’

Key Takeaways

• Tesla’s quarterly earnings results missed Wall Street’s expectations.
• Compared to the same period last year, Tesla’s total automotive revenue fell 20%, its total revenue fell 9% and gross profit declined by 15%.
• CEO Elon  Musk told investors he will begin pulling back from the Department of Government Efficiency in May.

After Tesla reported a major drop in first-quarter profits compared to 2024, CEO Elon Musk told investors he will start pulling back from the Department of Government Efficiency (DOGE).

While he defended his work with DOGE, Musk said that the time he allocated to the government cost-cutting project “will drop significantly” from May.

Tesla Quarterly Results

While investors were already aware of Tesla’s weak quarterly deliveries, the company’s performance announced on Tuesday, April 22, was even worse than expected.

The Wall Street consensus for the quarter was $21.345 billion in revenue and earnings of $0.41 per share. But the firm missed expectations with earnings of $0.27 per share and $19.335 billion in revenue.

Compared to the same period last year, Tesla’s total automotive revenue fell 20%, its total revenue fell 9% and gross profit declined by 15%.

Combined with rising capital expenditure, the drop in revenues contributed to a whopping 71% decline in earnings per share.

Investors Blame Anti-Musk Sentiment for Tesla Woes

As the reality of Tesla’s weak sales has become clear in recent months, a growing cohort of investors has started to point the finger at Musk.

Two factors that weigh heavily on market sentiment relate to Musk’s work in government.

On the one hand, with its CEO otherwise occupied, there is concern that Tesla’s ship has no captain during a critical time for the company.

Meanwhile, as DOGE fuels mass protests and a sizable boycott movement, market analysts are worried that Musk’s association with Donald Trump has permanently damaged the Tesla brand.

Musk Responds to DOGE Criticism

Responding to the criticism during Tuesday’s earnings call, Musk dismissed it as “natural blowback” from people affected by DOGE cuts.

“Those who were receiving the wasteful dollars will try to attack me and the DOGE team and anything associated with me,” he stated.

However, Musk defended his efforts to downsize the government. He said, “I believe the right thing to do is to just fight the way and forward and get the country back on the right track […] Because if the ship of America goes down, we all go down with it, including Tesla.”

Looking to shift some of the blame for Tesla’s poor financial performance, Musk acknowledged that tariffs and other “near term headwinds” were “tough” for the whole automotive sector.

Pulling Back From DOGE

Despite calls for him to step back from DOGE completely, Musk told investors he intends to see out “the remainder of the president’s term.”

However, he did commit to dialing back the amount of time he spends working with the government.

“Starting probably next month, May, my time allocation to Doge will drop significantly,” he said.

Following the earnings call, Tesla stock jumped in after-hours trading. This suggests investors are bullish about Musk’s potential return to the fray despite the firm’s worse-than-expected Q1 numbers.

As Wedbush Securities analyst Dan Ives put it recently, if Musk is no longer distracted by DOGE,  “Tesla will have its most important asset and strategic thinker back as full-time CEO.”