Can Elon Musk Save Tesla? Plans to Cut Back on Government Role Amid Profit Slump

With profits down and criticism on the rise, Tesla CEO Elon Musk says he’s stepping back from his government advisory role to focus more on reviving the company’s core business.

Speaking during Tesla’s Q1 2025 earnings call, Musk said he’ll be reducing his involvement with the Trump administration’s Department of Government Efficiency (DOGE), limiting it to just one or two days a week starting in May.

“The priority now is getting Tesla back on track,” Musk told analysts during the call.

The move follows a tough quarter for the electric vehicle maker. Tesla reported a 71% drop in net profit, with revenue falling 9% year-over-year to $19.34 billion. Automotive revenue, the company’s main business, declined by 20%, prompting Tesla to scale back earlier growth targets for the year.

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Industry watchers have pointed to several factors behind the slump — rising tensions in global trade, new tariffs between the US and China, and concerns among consumers about Musk’s political involvement.

Musk’s close ties to President Trump and his prominent role in DOGE have sparked public backlash, including protests and damage to Tesla showrooms. Musk controversially suggested that some of these incidents may have been driven by misuse of government funds — a claim that remains unproven.

Some analysts believe Musk’s political profile is hurting Tesla’s image, especially as the EV market becomes more competitive and buyers grow more cautious.

Despite the lukewarm results, Musk offered a hopeful outlook. He reaffirmed Tesla’s plan to release a lower-priced electric vehicle in early 2025 and confirmed that the long-awaited robotaxi launch is still set for June in Austin, Texas. He also predicted that millions of fully self-driving Teslas could be on the road by late 2026.

News of Musk’s shift in focus seemed to calm investor nerves as Tesla shares rose 5.5% after the announcement. But the stock is still down about 50% from its peak in December.

Despite the bounce, analysts warn that the road ahead won’t be easy. Rising costs, regulatory uncertainty, and stiff competition remain major challenges for Tesla as it tries to regain momentum.