Tesla Q1 Falls Far Short, Musk to Scale Back DOGE Involvement

Tesla CEO Elon Musk said Tuesday (April 22) that the time he spends with the Department of Government Efficiency, or DOGE, will “drop significantly” starting in May.

During Tesla’s Q1 earnings call, Musk said and he will be devoting “far more” of his time to the electric vehicle maker.

DOGE’s work is “mostly done,” Musk said, adding that he plans to devote one to two days per week overseeing the group’s efforts throughout Trump’s term to ensure “waste and fraud” does not come back.

Musk had faced criticism for not paying enough attention to Tesla as he ramped up his DOGE and political activities. His alliance with President Trump also brought dismay to many consumers, which has depressed Tesla demand and ignited acts of vandalism against some Tesla dealerships.

“There’s been some blowback for time that I’ve been spending in government with … DOGE,” Musk said.

Tesla, whose shares have fallen by 41% year-to-date due to Musk’s political involvement, has gone through many crises and “near-death experiences,” Musk said. “This is not one of those times. We’re not on the ragged edge of death — not even close.”

Asked about the impact of tariffs, Musk said Tesla is probably the least affected of all the U.S. automakers since it has a supply chain in North America, Europe and China.

Bank of America analysts agreed. According to an April 22 research note shared with PYMNTS, they said that unlike most U.S. automakers, Tesla makes all of its vehicles for the North American market in the U.S., “which significantly reduces tariff risk.”

But there is still tariff risk related to automotive parts, of which around 30% are sourced overseas, the analysts said. The impact could be “substantial” especially for supplies such as rare earths and raw material for batteries coming from China.

Read more: Tesla Enters Dining Business with Drive-In Restaurant

Permanent Brand Damage?

Musk also announced the launch of autonomous cars for the paying public in Austin, Texas, this June. The service will start with 10 to 20 cars. He said they will observe how the cars do and then quickly scale up.

As for the Optimus humanoid robots, Musk said he expects to have thousands of them working in Tesla’s factories by year end. He also thinks that Tesla will be making one million Optimus bots by 2029 or 2030.

Musk continues to believe that Tesla’s long-term future hinges on its humanoid robots and robotaxis. He expects to see these businesses start to boost financials in the second half of 2026.

Musk also envisions Tesla as the most valuable company on earth “by far,” as long as it executes excellently.

But Wedbush analyst Dan Ives believes that Tesla’s brand has suffered a 15% to 20% “permanent demand destruction for future Tesla buyers due to the brand damage Musk has created” by working with Trump, according to CNBC.

“Tesla has now unfortunately become a political symbol globally of the Trump Administration/DOGE,” according to Ives’ research note. “Tesla’s stock has been crushed since Trump stepped back into the White House.”

According to a CNBC survey conducted earlier this month, 47% of respondents have a negative view of Tesla and half also have a negative view of CEO Elon Musk.

A Tesla executive acknowledged on the call that the “negative impact of vandalism and unwarranted hostility” towards the Tesla brand and workers did hurt certain markets.

In the first quarter, Tesla reported a 71% drop in net income to $409 million, or 12 cents per share, compared to a year ago. Total revenue fell by 9% to $19.34 billion.

Financial results fell far short of expectations, which are earnings of 39 cents per share on revenue of $21.11 billion for the first quarter.

Separating out automotive revenues, Tesla reported a 20% drop to $13.97 billion in the quarter, year over year.

Besides the negative impact of Musk’s presence, the carmaker said the sales drop was in part due to the update of the Model Y — its most popular car — across all four vehicle factories that led to lost production.

Share of Tesla rose 3.3% to $245.78 in after-hours trading. It closed higher by 4.6% on Tuesday ahead of the earnings results.

Photo: Tesla