Tesla’s profits have collapsed—down a staggering 71% in the first quarter—while CEO Elon Musk devotes increasing time and attention to his political role in President Trump’s administration instead of the company he leads.
On Tuesday, Tesla reported just $409 million in earnings for the first three months of 2025. That’s a sharp drop from $1.4 billion during the same period last year. Revenue is also down 9%, and the company’s stock has plummeted nearly 37% since January, closing Tuesday at $238 a share.
The financial blowout comes as Musk doubles down on his leadership of the federal “Department of Government Efficiency” (DOGE), a cost-cutting initiative pushed by Trump that has sparked controversy, protests, and internal concern at Tesla.
“I believe the right thing here is to just fight the waste and fraud and get the country back on the right track and working together with President Trump and his administration,” Musk said on Tesla’s earnings call. “Because if the ship of America goes down, we all go down with it, including Tesla and everyone else.”
But critics argue that while Musk is chasing political influence in Washington, Tesla is struggling.
A letter from eight state treasurers, sent to Tesla’s board ahead of the earnings call, voiced frustration with Musk’s divided attention: “Musk continues to divide his attention across multiple companies and a high-profile advisory role within the federal government. These external commitments raise serious questions about whether Tesla’s leadership is fully engaged in addressing the company’s core challenges.”
Musk tried to ease investor fears, saying he’ll be “allocating far more of my time to Tesla now that the major work of establishing” DOGE is “done.” He added, “Starting probably next month, May, my time allocation to DOGE will drop significantly.”
Still, he admitted he won’t be stepping away from Washington entirely. “I will likely spend one to two days of the week on government matters for as long as the president would like me to do so and as long as it is useful.”
The fallout from Musk’s split focus goes beyond Wall Street. Tesla showrooms across the U.S. have been hit by demonstrations—some peaceful, others violent—including incidents of arson, vandalism, and shootings. The unrest is tied to Musk’s role in executing mass layoffs and budget cuts at federal agencies as part of DOGE’s efforts.
Meanwhile, global tensions are hitting Tesla hard. The company is caught in the middle of an escalating trade war, particularly with China. While many assumed Tesla’s U.S.-based manufacturing would shield it from tariffs, retaliatory moves from other countries are driving up costs.
“Uncertainty in the automotive and energy markets continues to increase as rapidly evolving trade policy adversely impacts the global supply chain and cost structure of Tesla and peers,” the company wrote in its Q1 report. “This dynamic, along with changing political sentiment, could have a meaningful impact on demand for our products in the near-term.”
Tesla even suspended new orders for two models in China earlier this month after Beijing hiked tariffs on American goods to 125%. Analysts say this shows just how cornered Musk and the company are in the current geopolitical climate.
On top of everything, vehicle sales are also dropping. Tesla delivered 336,000 vehicles between January and March—down from 387,000 during the same period last year, a nearly 13% decline.
Despite the rough quarter and growing scrutiny, Musk remains upbeat. “I continue to believe that Tesla, with excellent execution, will be the most valuable company in the world by far,” he said.
The company is trying to shift attention to its long-term bets, including artificial intelligence and robotics. “AI is a major pillar of growth for Tesla and the broader economy and key to our pursuit of sustainable abundance,” the company wrote.
But right now, none of that is enough to calm investors. Tesla is bleeding profits, losing market share, and under political fire—and the man at the top is still splitting his week between boardrooms and the White House.
