Tesla’s stock price has climbed over 20 percent following an announcement from CEO Elon Musk about his intention to dedicate significantly more hours to the company beginning in May.
During Tesla’s first-quarter earnings call on Tuesday, this piece of news served as a much-needed boost for shareholders who had grown frustrated with Musk’s split focus following his involvement with the Trump administration over the past three months.
At Friday’s close Tesla stock was trading as high as $284.96 per share, up 20% from Tuesday’s closing price of $237.97.
Several experts remain hopeful that this might signal the beginning of a lasting upturn for the firm.
Following Donald Trump’s inauguration, the CEO of Tesla has garnered attention by making headlines as the
informal leader of the Department of Government Efficiency (DOGE)
, a role that has made Tesla’s brand politically charged among customers.
Given DOGE’s contentious work, including initiating sweeping federal layoffs, investors this year have grown worried about damage to the brand.
Musk stated during the earnings call that starting from next month, he would dedicate much more of his time to Tesla. He also mentioned that the significant task of setting up the Department of Government Efficiency had been completed.
He said he would continue to spend a day or two a week on government matters, ‘as long as it is useful’ and the president wants him to do so.
Before Tuesday, Tesla’s stock had dropped 44% for the year, with their first-quarter earnings significantly below projections.
Musk stated that he was managing his companies with significant challenges during his tenure with DOGE.
Investors had their reason. Tesla boycotts and protests grew in the first quarter, while weak deliveries and sales data in the US and abroad led to a dismal earnings report on Tuesday.
‘It’s going to be viewed historically as probably the most important conference call Musk has ever had,’ Wedbush Securities analyst Dan Ives said about the DOGE step-back announcement, speaking to
Bloomberg TV
.
Though a long-time Tesla bull, Ives was a loud critic of Musk’s political ambitions in the first quarter.
Following Elon Musk’s departure from DOGE, the stock received an uplift and found new momentum for further increases on Friday.
Despite dropping almost 50% since its peak in December, Tesla’s stock remains highly valued when considering the most important factor over the long term: its profits.
Given that it’s trading at 110 times its anticipated earnings per share this year, the stock is valued over 25 times higher compared to General Motors. In contrast, the typical company within the S&P 500 index has a valuation of under 20 times its earnings.
This gives Tesla very little room for mistakes if anything goes awry.
Trump has regularly praised tech billionaire Elon Musk’s Department of Government Efficiency for its role in cutting the size of the federal workforce and halting thousands of government programs and contracts.
In just three months, entire government agencies have been dismantled and hundreds of thousands of workers from the 2.3 million-strong federal workforce have been fired or have agreed to take buyouts.
Musk said
he will soon be stepping back
with his 130-day mandate as a special government employee set to expire at the end of May.
His imminent departure raises questions about the future of DOGE, although the White House insists its work will continue.
DOGE was established through an executive order issued by President Trump on his inaugural day, January 20, aimed at “upgrading federal technology and software to enhance governmental efficiency and productivity.”
Despite its name, DOGE is not a government department created by an act of Congress. It is a temporary organization that took over an existing unit within the White House, the U.S. Digital Service.
Its mandate, due to expire on July 4, 2026, now far exceeds the confines of the language of the initial executive order as its staffers sweep through government departments looking for spending and staff cuts.
The wealthiest individual globally, Musk, doesn’t receive a paycheck from the government, according to statements made by the White House.
Critics argue that DOGE was granted exceptional authority by Trump, suggesting it possesses disproportionate influence.
functions without supervision and in secrecy
, despite Musk claiming it is transparent.
On Friday, Tesla’s stock price increased even more following the announcement from the US Department of Transportation.
more lenient regulations for self-driving cars,
Self-driving vehicles utilized for testing purposes will be exempted from specific safety regulations.
This shift was portrayed as a means to assist U.S. companies remain competitive amid an increasing challenge from China.
‘This Administration understands that we’re in a race with China to out-innovate, and the stakes couldn’t be higher,’ U.S. Secretary of Transportation Sean Duffy said in a statement.
‘As part of DOT’s innovation agenda, our new framework will slash red tape and move us closer to a single national standard that spurs innovation and prioritizes safety.’
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