Elon Musk unveils plans to step back from DOGE but remain involved

WASHINGTON - Elon Musk says he plans to scale back his role in Washington and shift his focus back to Tesla after the electric vehicle maker reported a sharp decline in first-quarter profits. 

The move comes amid criticism from investors who say Musk has been too distracted by his work with the federal Department of Government Efficiency, or DOGE — a Trump administration initiative aimed at cutting government jobs.

On a conference call with analysts Tuesday, Musk said he would "spend more time at Tesla starting in May." The company’s stock, which has fallen more than 40% this year, rose nearly 5% in after-hours trading following his announcement.

Musk shifts focus after investor frustration

What they're saying:

Tesla’s quarterly results were well below expectations. Profit fell 71% to $409 million — just 12 cents per share — and revenue dropped 9% to $19.3 billion. Analysts had already braced for weak numbers after the company reported declining deliveries, but the earnings still disappointed.

Some shareholders have blamed Musk’s involvement with DOGE for Tesla’s recent underperformance. Others say his controversial public support for far-right politicians has hurt Tesla’s brand abroad, particularly in Europe and China. The backlash was visible earlier this year when protesters disrupted a Tesla shareholder meeting over Musk’s role in the federal jobs group.

"This is a big step in the right direction," said Wedbush analyst Dan Ives, reacting to Musk’s announcement. "Investors wanted to see him recommit to Tesla."

New product plans after weak quarter

What's next:

Musk tried to shift attention toward Tesla’s future, outlining two major launches planned for 2025. First, a cheaper version of the Model Y SUV — Tesla’s top seller — is set to debut in the first half of the year. The company is also preparing to launch a paid driverless robotaxi service, starting in Austin, Texas, in June, and expanding to other cities in the months that follow.

White House Senior Advisor Elon Musk walks to the White House after landing in Marine One on the South Lawn with U.S. President Donald Trump (not pictured) on March 9, 2025 in Washington, DC.  (Photo by Samuel Corum/Getty Images)

"There will be millions of Teslas operating autonomously in the second half of the year," Musk said. "Can you go to sleep in our cars and wake up at your destination? I’m confident that will be available in many cities in the U.S. by the end of this year."

Tesla navigates new headwinds

Big picture view:

Tesla’s gross margins fell to 16.3% from 17.4% a year earlier, as competition in the EV space grows more intense. Chinese automaker BYD is rolling out ultra-fast battery charging technology, and European rivals have launched new electric models with advanced features, just as Musk’s global image has become increasingly divisive.

New U.S. tariffs will hit Tesla’s energy business the hardest, the company said, though it expects less impact on domestic car production. Still, some materials used in Tesla vehicles are imported and may now face added costs. Retaliatory tariffs from China have already forced the company to stop taking orders for its Model S and Model X in the country.

On a more positive note, Tesla reported $2.2 billion in operating cash flow — a jump from $242 million a year ago — and $595 million in revenue from selling regulatory credits, up from $442 million last year.