Elon Musk told Tesla investors he’s scaling back his work at the Trump administration’s Department of Government Efficiency, or DOGE, saying the amount of time he spends on the task force will “drop significantly” starting in May.
As the Trump administration’s cost-cutting initiative, DOGE has slashed tens of thousands of federal jobs in the name of reducing fraud, waste and abuse. But DOGE has also sparked a backlash — and plenty of lawsuits — as critics accuse it of accessing voters’ private data and cutting programs that are vital to many Americans.
At the same time, Tesla’s sales have taken a hit as the automaker’s vehicles have increasingly become a symbol of the Trump administration, repelling some consumers. The stock has also plunged more than 50% from its most recent high in December, when the shares surged after the presidential election on optimism that Musk’s role advising Mr. Trump would help the EV maker’s bottom line.
“Starting probably in next month, in May, my time allocation to DOGE will drop significantly,” Musk said on a conference call to discuss Tesla’s earnings.
But Musk added he plans to continue his involvement with DOGE throughout Mr. Trump’s term, saying he will likely spend one to two days a week on government issues moving forward. “Starting next month, I’ll be allocating far more of my time to Tesla,” he said.
Tesla shares, which have fallen 41% this year, jumped 4% to $247.53 after Musk vowed to scale back his work at DOGE.
Tesla’s first-quarter earnings, announced Tuesday, fell far short of analyst expectations, with revenue tumbling 9% and profit slumping 71%.
Musk’s leaving DOGE might not heal the wounds that Tesla has suffered due to Musk’s activities, some analysts say.
“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 go beyond politics. The company that once dominated the EV market is now facing fierce competition from U.S. automakers such as Ford to rivals in Europe that are offering new models with advanced technology that is making them real alternatives.
Earlier this year, Chinese EV maker BYD announced it had developed an electric battery charging system that can fully power up a vehicle within minutes.
Tariff retaliation from China is also likely to hurt Tesla. The company was forced earlier this month to stop taking orders from mainland customers for two models, its Model S and Model X. It makes the Model Y and Model 3 for the Chinese market at its factory in Shanghai, the Associated Press reported.
contributed to this report.