Elon Musk, facing one of the worst quarters in Tesla’s history, said Tuesday he would scale back his cost-cutting work with the Trump administration and spend more time running his company.
“Starting probably in next month, May, my time allocation to DOGE will drop significantly,” Musk said on a call with Tesla’s investors, adding that he plans to still spend a day or two a week as the president’s cost-cutter-in-chief.
The Tesla CEO also said that when it comes to the automaker’s biggest new problem — Trump’s wide-ranging tariffs — he is powerless to persuade the president to take a different course.
The messages of change and frustration came on a day of bad financial news for the all-electric automaker. Tesla’s automotive revenue in the first quarter of the year dropped 20 percent compared with a year earlier. Meanwhile, profits dropped much more steeply, by 71 percent.
President Donald Trump, and Musk’s partnership with him, dominated Tesla’s explanation of the challenges it faces, though it did so in careful language.
“Rapidly evolving trade policy adversely impacts the global supply chain and cost structure of Tesla and our peers,” Tesla said in a financial statement. “This dynamic, along with changing political sentiment, could have a meaningful impact on demand for our products in the near-term.”
In March, when he appeared at the White House to sell the president a Tesla, Musk predicted that Tesla would double its output in the U.S. in the next two years.
On Tuesday, he did not repeat the claim.
Since joining the Trump administration to run the project called the Department of Government Efficiency, or DOGE, Musk has generated fury in North America and the U.S., two of the automaker’s largest markets, among those who used to be Tesla’s ardent customers. Musk’s chainsaw-like approach to cutting government services and mass firings of federal employees, along with his endorsement of far-right parties in Europe, have led to demonstrations at Tesla showrooms and vandalism of its properties, and caused some potential Tesla buyers to reconsider.
Musk did not offer any words of apology or reconciliation to those he might have offended.
Instead, he said that Tesla’s opposition is powered by wealthy people upset by being denied federal money they don’t deserve. “They’re obviously not going to say, admit that the reason that they’re protesting is because they’re receiving fraudulent money,” Musk said. “But that is the real reason for the protests.”
Tariffs come for Tesla’s batteries
Tesla on Tuesday had to deliver a double-sided message: Its energy storage business is booming, but that business is deeply vulnerable to Trump’s worldwide trade war.
On one hand, the company reported its energy-storage business — providing stationary batteries to homes, businesses and the grid — was on a tear in the first quarter, growing 154 percent compared to the same period a year earlier.
On the other, it reported in a financial statement that “the current tariff landscape will have a relatively larger impact on our energy business compared to automotive.”
Tesla has more domestic content than other automakers and so may feel less damage from tariffs compared to rivals who import more. But in selling a stationary battery — essentially, a Tesla minus the car parts — Tesla is still highly reliant on China, which produces most battery raw materials and is subject to 145 percent tariffs from the Trump administration.
“Tariffs are still tough on a company when margins are still low,” Musk said.
Previously, Musk has directed his tariff ire at Trump’s chief trade adviser, Peter Navarro, whom he has called “dumber than a sack of bricks.”
On Tuesday, he was more diplomatic on the topic and took care not to utter Trump’s name.
“I’ve been on the record many times saying that I believe lower tariffs are generally a good idea for prosperity, but this decision is finally up to the elected representative of the people, being the president of the United States,” Musk said. “So I’ll continue to advocate for lower tariffs … but that’s all I can do.”
Musk told investors that he was optimistic about the company’s future.
He predicted that millions of Teslas will be operating with full autonomy by the second half of 2026 and that the company will be making a million copies a year of Optimus, the company’s prototype humanoid robot, by 2030.
Tesla’s stockholders seemed to remain confident despite Tesla’s dropping sales. Tesla’s stock rose $12 in after-hours trading.
