Elon Musk To Refocus On Ailing Tesla With DOGE Work ‘Mostly Done’

Elon Musk vowed to pull back “significantly” from his work with the US government to concentrate on Tesla Inc., easing concerns of investors who lamented his time in Washington as a distraction.

The chief executive officer will devote “far more of my time to Tesla” beginning next month, saying Tuesday that his stint leading the Department of Government Efficiency will be largely complete.

Investors and analysts have increasingly called for Musk to refocus on the electric-car company, which is struggling under the weight of slumping sales and rising costs from President Donald Trump’s trade war. Protests have sprung up in recent months in a consumer backlash over Musk’s government work.

The stock rose 5.1% at 7:43 p.m. in extended New York trading, rallying from an initial lukewarm reaction to Tesla’s first-quarter results that underscored the deep challenges facing Tesla’s automotive and energy business lines. The company reported adjusted earnings of 27 cents per share for the first quarter, below the average analyst estimate, while backing off its earlier prediction that sales would return to growth this year.

Wall Street has soured on Musk’s political activities, which have alienated core customers and caused serious damage to perceptions of his brand. Musk’s personal wealth has declined by more than $130 billion this year due to a selloff in Tesla shares.

Gene Munster, managing partner at Deepwater Asset Management, said that Musk wrapping up his DOGE work is “pretty simple math” as vehicle demand declines.

“The central piece needed to heal the brand is for him to step back from DOGE, that was the minimum dosage needed,” Munster said.

Brian Mulberry, a client portfolio manager at Zacks, said it’s “certainly welcome news to hear that Elon will be back in his normal role as CEO of his companies soon.”

The company said that it’s “making prudent investments that will set up” the vehicle business for growth. That will depend on factors including production increases and the “broader macroeconomic environment.”

Musk added on the call that he had pushed for lower tariffs — underscoring his divergence with Trump on the issue. Trump’s moves to hike US duties on foreign goods have spooked investors and raised concerns of higher prices for US consumers. Musk said the tariff decisions are “entirely up to the president.”

Musk said he’ll continue to work with the Trump administration for “the remainder of the president’s term,” but on a more limited basis. He is already poised to hit the 130-day limit that was designated for his role as a special government employee.

Trump’s tariffs have compounded Tesla’s challenges, and threaten to upend automotive supply chains globally and drive up costs across the industry. While Tesla is expected to be relatively less affected than many carmakers due to its large plants in California and Texas, its vehicles nevertheless contain some non-US components, and the company has warned of a potential impact.

Musk told analysts that Tesla has been working on localized supply chains to help ease logistics and minimize risks of higher costs. 

“We are the least affected car company with respect to tariffs,” he said, but emphasized they are still difficult to navigate. “That puts us in a stronger position than any of our competitors.”

‘Tight Rope’

Ben Kallo, a senior research analyst with Baird, said the mention of tariffs is a way for the company to alert policy makers of the pain the levies are causing. 

“It’s a way to get the message across that tariffs are going to impact Elon without him saying that as part of the US government,” Kallo said. “He’s walking a tight rope there while part of the government with DOGE.” 

Tariffs will have a “relatively larger impact” on the energy business compared to automotive, Tesla said. The company’s Megapack energy storage systems heavily rely on lithium battery cells from China, which accounted for 84% of global lithium-ion battery production capacity in 2024, according to research firm Wood Mackenzie. By comparison, North America made up just 5%.

Consumer Backlash

Musk’s endorsement of controversial political positions in Europe and close ties to Trump have also sparked backlash globally. Tesla showrooms and charging stations have become targets for protests and vandalism, particularly in the US. Tesla Takedown, a protest group that accuses Musk of harming democracies around the world, is encouraging people to sell their Tesla vehicles and the company’s stock while condemning violence and vandalism. 

Earlier this week, Wedbush Securities analyst Dan Ives wrote that Tesla faces “potentially 15%-20% permanent demand destruction for future Tesla buyers due to the brand damage Musk has created with DOGE.” 

The company said that “changing political sentiment” is another element that “could have a meaningful impact on demand for our products in the near-term.” 

Musk told analysts that protests against his company are “organized and paid for,” without offering details or evidence. 

In an emailed response to Musk’s statements, a representative for Tesla Takedown said the movement “doesn’t pay protesters.” 

“Volunteer hosts and participants are stepping forward because they believe in democracy and the rule of law, not because an unknown billionaire is paying them,” the group said. “The irony is rich coming from a man who spent $277 million to get Donald Trump elected and $21 million meddling in a failed attempt to sway Wisconsin for his own benefit.”

Autonomy, Robotics

Musk is increasingly betting Tesla’s future on autonomy, such as a driverless taxi, and robotics, including the humanoid Optimus robot.

“While we continue to execute on innovations to reduce the cost of manufacturing and operations, over time, we expect our hardware-related profits to be accompanied by an acceleration of AI, software and fleet-based profits,” the company said in its shareholder deck.

Tesla said new vehicles, including more-affordable models, remain on track for the start of production in the first half of this year, refuting an earlier Reuters report on delays. Tesla has given few details about the upcoming vehicles. On Tuesday, Lars Moravy, vice president of vehicle engineering, said the affordable vehicles will resemble other Tesla models.

Tesla said it had already prepared its factories for the launch of new models during downtime while switching production lines over for the refreshed Model Y. 

The company’s robotaxi launch, scheduled in June in Austin, will start with 10 to 20 vehicles and scale from there, Musk said.