Elon Musk informed Tesla investors that he is reducing his workload at the Trump administration’s Department of Government Efficiency, or DOGE, stating that his time on the task force will “drop significantly” beginning in May.
As part of the Trump administration’s cost-cutting initiative, DOGE has eliminated tens of thousands of federal jobs in the name of reducing fraud, waste, and abuse. However, DOGE has sparked a backlash — and numerous lawsuits — as critics accuse it of accessing voters’ private data and cutting programmes that many Americans rely on.
At the same time, Tesla’s sales have declined as the automaker’s vehicles have become a symbol of the Trump administration, alienating some customers. The stock has also fallen more than 50% since its most recent high in December, when it surged following the presidential election on hopes that Musk’s role advising Mr. Trump would benefit the EV maker’s bottom line.
“Starting probably next month, in May, my time allocation to DOGE will drop significantly,” Musk said on a conference call to discuss Tesla’s earnings.
However, Musk stated that he intends to continue his involvement with DOGE throughout Mr. Trump’s term, estimating that he will spend one to two days per week on government issues going forward. “Starting next month, I’ll be allocating far more of my time to Tesla,” said the inventor.
Tesla shares, which have fallen 41% this year, rose 4% to $247.53 after Musk pledged to reduce his role at DOGE.
Tesla’s first-quarter earnings, announced Tuesday, fell far short of analyst expectations, with revenue falling 9% and profit declining 71%.
Some analysts believe Musk’s departure from DOGE will do little to heal the wounds caused by Musk’s actions at Tesla.
“Musk’s personal brand has been permanently tarnished by his political activities in the last several months, and exiting DOGE won’t change that,” noted Adam Crisafulli of Vital Knowledge in a Tuesday research note. “On top of all this, the stock remains very expensive.”
Tesla’s issues extend beyond politics. The company that once dominated the EV market is now facing fierce competition from US automakers such as Ford and European rivals who are offering new models with advanced technology that make them viable alternatives.
Earlier this year, Chinese electric vehicle manufacturer BYD announced the development of an electric battery charging system capable of fully charging a vehicle in minutes.
Tariff retaliation from China is also expected to harm Tesla. Earlier this month, the company was forced to stop accepting orders from mainland customers for two models, the Model S and Model X. It produces the Model Y and Model 3 for the Chinese market at its Shanghai factory, according to the Associated Press.