Tesla CEO Elon Musk has announced plans to significantly reduce his involvement in the Trump administration’s Department of Government Efficiency (DOGE), a controversial task force to slash federal spending. During Tesla’s quarterly earnings call, Musk said his time commitment to the task force would “drop significantly” starting in May, allowing him to focus more on the electric vehicle company, CBS News reported.Â
DOGE, a key part of former President Donald Trump’s cost-cutting agenda, has drawn criticism for massive job cuts and alleged misuse of voter data. While supporters claim it targets fraud and waste, the initiative has sparked lawsuits and public backlash over cuts to essential programmes.
Tesla, meanwhile, is grappling with declining sales and a steep drop in stock value. Once boosted by Musk’s advisory role in the Trump administration, the company’s shares have fallen over 50% from their December peak. On Tuesday, Tesla reported a 71% drop in profit and a 9% fall in revenue for the first quarter, missing Wall Street expectations.
Following Musk’s announcement to step back from DOGE, Tesla shares rose 4%, closing at $247.53. However, analysts warn that Musk’s association with Trump’s policies may have already caused lasting damage to Tesla’s brand image.
“Musk’s personal brand has taken a hit due to his political affiliations, and stepping back from DOGE may not be enough to reverse that,” said Adam Crisafulli of Vital Knowledge in a note to investors.
Tesla also faces intensifying global competition. U.S. automakers and European rivals are fast catching up with new EV models featuring cutting-edge technology. Chinese EV giant BYD recently unveiled a battery system capable of charging vehicles in minutes, posing a significant challenge to Tesla’s dominance in China, a key market.
Further complicating matters, Tesla halted orders for its Model S and Model X in mainland China earlier this month, reportedly due to potential retaliatory tariffs amid U.S.-China tensions. The company continues to manufacture the Model Y and Model 3 at its Shanghai facility for the local market.
As Musk looks to re-prioritise Tesla, the road ahead remains fraught with political, competitive, and market pressures, both at home and abroad.
