The news comes hours after Tesla reported quarterly profits of 71% and car revenues fell by 20%. Total revenue fell 9% year-on-year to $19.3 billion between January and March, with analyst expectations missing.
“The amount of work necessary to get the Mendog team in place and work with the government to get the financial institutions in order is done,” Musk told analysts on Tuesday’s earnings call. He added: “I think my allocation of these times will be greatly reduced starting around May next month.”
Strongly brewing Musk’s political role
Musk’s role in Trump’s White House has sparked international protests. Demonstrators targeted Tesla’s showrooms around the world, condemning him for participating in federal work. Vandalism and strikes have been reported in several cities.
Tesla Chief Financial Officer Vaibhav Taneja confirmed the impact: “The negative impact of intentional destruction and hostility to our brand has had an impact in some markets. Nevertheless, we were able to sell the legacy model Y.”
Despite this, Musk stood at his doe job. “Working for the administration to keep financial institutions organized,” he said. “I will continue to advocate for lowering tariffs…but that’s all I can do.” He later added, “I hope to work for the administration for a day or two for the rest of Trump’s presidency to make sure the waste and fraud we stop are not coming back.”
Investor concerns and market reactions
Tesla’s stock has been struggling, climbing 5.5% in after-hours trading after Musk announced he would bring more time to his company.
“I think Musk’s more focus on Tesla is the stock’s net worth,” said Shawn Campbell of Camelthorn Investments. “But to see meaningful moves in the stock, we need to see a title that is more like ‘Musk leaves Max to refocus Tesla.”
Tesla’s stock has lost nearly half of its value since its peak in December, with Musk’s increasing emphasis on Washington.
Tariffs, trade and tensions
Tesla is facing tremendous pressure to change its trade policy. The U.S. tariffs on Chinese imports recently reached 145%, prompting China to retaliate. Since then, Tesla has suspended imports of key components and has stopped orders for new and X models in China.
“Uncertainty in the automotive and energy markets continues to increase as the adverse impact of rapidly growing trade policies on Tesla and our peers’ global supply chains and cost structures,” the company warned in a statement.
“I have recorded it on the record many times and I believe lowering tariffs is usually a good idea,” Musk admitted. But he admitted: “This decision is fundamentally determined by the elected people, and is the president of the United States.”
Missing target, margin pressure
Tesla’s auto gross margin does not include regulatory credit, down from 13.6% in the fourth quarter to 12.5%, a slight estimate, but still reflects cost pressure. Despite the cost savings, the company’s net revenue dropped sharply.
Earlier this month, Tesla revealed that delivery in the first quarter fell 13%. Analysts now forecast delivery for the second consecutive year in 2025.
Tesla said the fall was due to the factory renovation. “In all four of our plants, the conversion of the Y model line caused weeks of losses in the first quarter production,” the company said at the release.
New model, same line
Despite these setbacks, Tesla reiterated its plan to launch a more affordable car in the first half of 2025.
“The ramps may be slower than we initially hoped,” said Lars Moravy, vice president of engineering at Tesla. “The models that appear in the next few months will be built on our lines and shape the cars we currently make. The key is that they will be affordable and you will be able to buy.”
Reuters has previously reported that Tesla plans to offer a stripped, used Y-type Y variant in its low-cost strategy, although production may be delayed by several months.
Robotaxi Dream
Tesla also reiterated plans to launch a robot fleet in Austin, Texas in June. The project depends on regulatory approval and remains in trouble on security and litigation issues.
Asked when it will be possible to start deploying Volkswagen, Musk replied: “By the second half of next year, millions of Tesla people will operate completely autonomously.”
But competition is intensifying. A few days after Tesla announced the news, Chinese rival Byd launched a new autonomous driving mode priced at just $9,600.
Tesla’s performance sluggishness comes with the competitiveness of the electric vehicle market. Chinese companies, especially BYD, are trapped in global market share. Domestic pressure, tariffs and reputational damage will only increase turmoil.
Dan Ives of Wedbush summarized it as: “We think of it as a pavement period.”
For now, Musk seems ready to quit politics – slightly back – refocus on the companies that helped build the empire. Whether this is enough to bypass Tesla’s fate is still uncertain.
(with agent input)
