Musk to reduce DOGE role after Tesla's profit tanks
What's the story
Tesla CEO Elon Musk has announced his intention to step back from the US government in a big way.
This comes after Tesla reported a 20% drop in sales revenue for Q1 2025 compared to last year, while profits fell more than 70%. The company also reported a 13% drop in car sales.
Musk has been heading an advisory body called the Department of Government Efficiency (DOGE), which aims to improve government efficiency by reducing spending.
Shift
Musk's reduced role in DOGE
Musk has announced that his time allocation to DOGE will be drastically reduced from next month.
"I think starting probably next month, May, my time allocation to DOGE will drop significantly," Musk said during a recent analyst call.
He plans to spend only one or two days a week on this role, saying he would continue in this capacity "as long as the president would like me to do so and as long as it's useful."
Backlash
Political involvement has sparked worldwide protests
Musk's deep political involvement has sparked global protests and boycotts of Tesla cars. His donation of over $250 million to Donald Trump's re-election campaign was also widely criticized.
Despite the backlash, Musk had described his work at DOGE as "critical," claiming "getting the government house in order is mostly done."
He had also admitted that changing political sentiment could drastically affect demand for Tesla cars.
Trade impact
Trade tariffs and supply chain concerns
Tesla's operations have also been affected by Trump's tariffs on China.
Although the company sells US-assembled vehicles, it depends heavily on parts made in China.
Musk admitted that although Tesla was less impacted by tariffs due to localized supply chains in North America, Europe, and China, they were "still tough on a company where margins are low."
Future
Plans for Tesla's future
Now that the major work of establishing DOGE is done, Musk plans to dedicate more time to Tesla.
Amid a recent profit plunge, Tesla remains committed to launching a more affordable version of its best-selling vehicle, the Model Y SUV, in H1 2025.
The company also aims to introduce a paid driverless robotaxi service in Austin by June this year.