The owner of Tesla, Elon Musk, has stated his intention to reduce his engagement with U.S. President Donald Trump’s administration after Tesla experienced a significant decline in its financial standing.
The company specializing in electric vehicles saw a 20% decrease in automobile sales revenue during the initial three months of 2025 from what was recorded for the equivalent timeframe in the previous year. Additionally, their earnings plummeted by over 70%.
The decrease occurred as Musk faced increasing criticism for his political involvement in Washington and amidst wider disapproval towards the company.
Sales slumped during the quarter as Musk became increasingly visible in the White House, serving as the head of Trump’s Department of Government Efficiency (DOGE) initiative.
On Tuesday, Tesla alerted investors that they will not be issuing a growth outlook, stating that “shifting political attitudes” might “substantially impact demand.”
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Musk, having contributed more than $250 million to support Trump’s reelection bid, admitted that his involvement in governmental affairs has diverted his focus from Tesla.
As reported by the BBC, he stated that his “dedication to DOGE” would “decrease considerably” beginning next month.
He mentioned that he plans to dedicate “only one or two days each week to governmental affairs ‘provided the president wishes for my involvement and as long as it remains beneficial’.”
His association with the Trump administration has led to demonstrations and worldwide demands to boycott Tesla goods.
Musk responded to the criticism by saying the “blowback” was driven by people who would “try to attack me and the Doge team”, but defended his role as essential, stating that “getting the government house in order is mostly done”.
Tesla’s overall income for the quarter amounted to $19.3 billion (£14.5 billion), marking a decrease of 9% compared to the same period last year and falling short of analysts’ predictions of $21.1 billion.
The firm had cut prices to lure customers, however, these steps weren’t sufficient to counteract the decline.
The tariffs introduced by the Trump administration on goods coming from China have increased pressures on Tesla’s supply chain, leading to higher expenses even though the cars sold in the United States are assembled domestically.
“This trend, coupled with evolving political attitudes, might significantly influence the demand for our products in the short term,” stated Tesla’s quarterly update.
Musk has clashed with other members of Trump’s cabinet, such as trade advisor Peter Navarro.
Earlier this month, Musk referred to Navarro as a “moron” following the advisor’s dismissal of Tesla, stating it is not a true “car manufacturer” but rather merely a “car assembler, in many instances.”
Even with the strain, Musk asserted on Tuesday that Tesla remains “the automaker least impacted by tariffs” due to its local supply chains spanning North America, Europe, and China.
Nevertheless, he acknowledged that tariffs are “challenging for businesses with narrow profit margins” and restated his position: “I will keep advocating for reduced tariffs instead of increased ones, but that’s all I can accomplish.”
In the future, Tesla is counting on artificial intelligence to drive its expansion, although experts continue to doubt this approach.
The company’s shares, having dropped approximately 37% from the beginning of the year, saw a recovery of over 5% during after-hours trading following the release of the quarterly results.
Dan Coatsworth, an investment analyst from AJ Bell, mentioned that expectations were extremely low following Tesla’s announcement earlier this month about a 13% decline in vehicle sales—the worst drop in three years.
He cautioned that continuing trade conflicts and disruptions in supply chains presented additional hazards.
“Tesla’s issues are increasing,” he stated.
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