Tesla boss Elon Musk says he will cut back his role in Donald Trump’s administration after the company’s profits and revenues plunged during the first three months of the year.
Sales slumped and the electric carmaker faced a backlash as Musk became a political fixture in the White House.
On Tuesday, the firm reported a 20% drop in automotive revenue in the first quarter of 2025, compared with the same period last year, while profits fell more than 70%.
The company warned investors that the pain could continue, declining to offer a growth forecast while saying “changing political sentiment” could meaningfully hurt demand.
The recent dip in the company’s fortunes came amid an outcry over Musk’s role in Trump’s new administration, which he acknowledged had taken his focus off the company.
The tech boss contributed more than a quarter of a billion dollars to Trump’s re-election. He also leads Trump’s Department of Government Efficiency (Doge) initiative to cut federal spending and slash the government workforce.
Musk said his “time allocation to Doge” would “drop significantly” starting next month. He would, he said, spend only one to two days per week on government matters “as long as the president would like me to do so and as long as it’s useful”.
Tesla brought in $19.3bn (£14.5bn) in total revenue in the quarter, down 9% year on year, according to the new numbers. That was less than the $21.1bn expected by analysts, and came as the company cut prices in a bid to woo buyers.
Trump’s tariffs on China also weighed heavily on Tesla, the company indicated. Although the vehicles Tesla sells in its home market are assembled in the US, it depends on many parts made in China. “Rapidly evolving trade policy” could hurt its supply chain and raise costs, according to the company.
“This dynamic, along with changing political sentiment, could have a meaningful impact on demand for our products in the near-term,” Tesla’s quarterly update said.
