Despite reporting over 70% profit declines and analyst expectations, Tesla (TSLA) finally gave investors something to celebrate or at least hope for, yesterday (April 22). CEO Elon Musk said in a graduation call that he will focus on electric vehicle manufacturers and will be head of the Trump administration’s Department of Efficiency (DOGE) starting in May.
Tesla’s stock price has fallen more than 40% so far this year ahead of yesterday’s revenue announcement as slowing sales and growing concerns about Tesla as a company and brand. Investors urge Musk to spend more time on Tesla in recent months.
Musk said his Monday to two days allocation will drop significantly,” and promised to dedicate the rest of his time to Tesla.
Tesla shares rose 8% after the revenue call. “Musk recommends taking the role of CEO of Tesla and essentially leaving him next month’s threshold role is the biggest and best news Tesla investors may hear last night,” said Dan Ives, an analyst at Wedbush Securities.
Seth Goldstein, equity strategist at Morningstar, said the move would help alleviate “due to his growing political engagement, “Musk could distract Tesla and potentially damage Tesla’s brand.”
In the first three months of 2025, Tesla’s revenue fell 9% year-on-year to $19.3 billion, while profits fell 71% to just $409 million. The company accused the sharp drop in vehicle delivery – related to the limitations of the Y-shaped redesign – of disappointing results.
When asked about the potential impact of Trump’s 25% tariff on imported cars and parts, Tesla’s local supply chain “puts us in a stronger position than any of our competitors.” Still, he warned the company that the impact of tariffs on automotive components can be felt as it imports many parts from Mexico and China.
Musk reiterated his belief in free trade and low tariffs. “I’ve recorded a lot of times that I think lower tariffs are often a good idea to prosper, but it fundamentally depends on the elected people who serve as elected representatives of the U.S. president,” he told analysts.
The company also reconfirmed plans to start production of more affordable models of Y cars this summer, and launched an unsupervised autonomous driving service in Austin, Texas in June.
It is unclear whether Musk’s renewed focus on Tesla can reverse the wave of strong rebound. According to a CNBC survey this week, his political role on the company has worsened public perceptions of the company, and 47% of Americans currently have negative views on Tesla. Ives warned that the damage associated with Doge “will not disappear just because of this move.
At least in the short term, other analysts are more promising. “By breaking [the DOGE] Links, sales may take place in the coming months. “Kathleen Brooks, an analyst at brokerage XTB, wrote.
As far as Musk is concerned, he is no stranger to adversity. “At Tesla, we’ve experienced many crises over the years, many nearly dying experiences,” he told analysts. In acknowledging that 2025 will bring “unexpected bumps,” he said he was optimistic about the company’s trajectory. “We are not on the brink of death in junk, and we are not even close.”
