Tesla CEO Elon Musk is responding to the electric vehicle manufacturer’s disappointing first-quarter financial results with some surprising rhetoric, according to CNN.
What’s happening?
Tesla announced its first-quarter results on Tuesday. Tesla revenue fell 9% in the last quarter, with auto revenue dropping 20%. Both drops were bigger than were forecast, but the downward trend was not unexpected. Perhaps most notably, Tesla’s net income dropped 71% year over year.
Reports and analysts have attributed much of the blame to Musk, citing that his actions and statements in U.S. and world politics have often been polarizing enough to lead some potential customers to say they would boycott or protest the company.
While many support the intentions of Musk’s work in the Department of Government Efficiency to reduce spending, it has upended decades of government structure and led to the cutting of many social programs and thousands of government employees. It’s those actions that have reportedly led many to protest outside Tesla locations, with Tesla being the primary public brand associated with Musk. Other concerns for shareholders, who have seen the company’s stock price drop in half in recent months, include that Musk’s DOGE work has been taking him away from the company.
It’s at least with that in mind that Musk also announced on the earnings call his intention to return and focus more of his time with Tesla again, though Musk argued that this work was necessary to keep Tesla in business.
“I think the right thing to do is fight the waste and fraud and try to get the country back on the right track,” said Musk on the earnings call, per CNN. “If the ship of America goes down, Tesla will go with it.”
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Why is Tesla important?
Tesla has been at the forefront of popularizing electric vehicles for years. It remains the most popular EV brand in America by far, building to be one of the world’s most valuable companies over the last decade. Regardless, political pushback against Musk has resulted in protests, and some owners have even disguised their Teslas as other brands.
Electric vehicles are a vital stepping stone to decarbonizing transportation. Light-duty vehicles contribute a significant amount of pollution into the atmosphere. That pollution traps heat, which exacerbates destructive weather patterns and warms oceans. At a more localized level, gas cars produce pollution that is bad for personal health, including drivers and passersby.
What’s being done about Tesla’s struggling profits?
Musk has pledged to spend much less time dedicated to DOGE, and focusing more on Tesla. He said he plans to only spend a day or two a week on DOGE work starting next month. This change may be the reason Tesla stock climbed despite the disappointing financial results.
Looking to the future, Tesla confirmed plans to release more affordable vehicles by the end of June.
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