Tesla CEO Elon Musk says he is cutting back from the U.S. government’s advisory group, the ‘Department for Government Efficiency,’ or Doge. In early 2025, following a report of an enormous 71 percent drop in profits and a steep decline in car sales, Tesla moved.
Last year, the company sold 13% fewer cars, and this year its stock has fallen more than 50 percent from its value. However, many investors and analysts feel that Musk’s political activities, and in particular his relationship with then-President Donald Trump, have damaged the Tesla brand and sales.
Backlash Over Political Involvement
Last year, Musk joined Doge to lower the government spending, but this triggered protests and boycotts because of his political ties. Others accused him of putting too much of a focus on politics, not so much on Tesla. That was confirmed by the fact that many Tesla owners are now selling their cars, and the brand was even removed from the Vancouver Auto Show for public outcry.
Musk now admitted that he would spend only one or two days a week on Doge. During a recent investor call, he stated that he would devote much more time to Tesla. But he also said he would work with the Trump administration as long as necessary.
Investor Reaction: Mixed Feelings
The announcement from Tesla CEO Elon Musk did not go down well with investors. Others were pleased that he is shifting attention to Tesla. Shawn Campbell, who is an investor, said this wasn’t enough. “We have to see Musk depart fully from Doge,” he told Reuters.
The news had a positive effect on Tesla stock as, despite a poor earnings report, the results were not as bad as analysts had expected. Wall Street’s expectations of $19.34 billion in revenue and $1.76 a share in earnings per share were missed.
Other Challenges: Tariffs and Economic Worries
Musk’s politics are not Tesla’s only problems. New tariffs add extra cost of car parts in trade tensions between the US and China. Most of Tesla’s vehicles are made in the US, but parts must be sourced from China. It could put a hit on the company’s profit margins and supply chain even further.
On top of that, the thousands of Cybertrucks that Tesla has also recalled already face stiff competition from other electric car manufacturers! This has obviously made for a hard class to travel toward.
Looking Ahead: Still Hopeful
Musk is positive in his current struggles. Tesla’s future with new technologies, including self-driving cars and a robotaxi service touted for later this year, was discussed by him. According to him, these innovations will help the world to realize ‘sustainable abundance’.
However, while many experts continue to hold out hope that Musk will fully commit to Tesla, the brand could be greatly hurt by his behavior. “Tesla needs its visionary leader to be spending 100 percent of time with the company to rebuild trust and propel future growth,” said one analyst.
