Tesla reported a sharp drop in revenue and profit in the first quarter of 2025, as political backlash and internal disruption hit the once-iconic electric vehicle maker hard. Elon Musk says he’s stepping back from his federal duties and will be able to focus on the struggling company.
Key Facts:
- Tesla’s automotive revenue fell nearly 20% year-over-year to $13.97 billion in Q1 2025.
- Total company revenue dropped 9%, while net income plummeted 71% to $409 million.
- Vehicle deliveries were down to 323,800, compared to 386,810 in Q1 2024.
- Musk announced a major reduction in time spent with DOGE, the Department of Government Efficiency.
- The company cited violent protests, political pressure, and trade policy changes as factors hurting demand and cost structures.
The Rest of The Story:
Tesla’s latest earnings report paints a grim picture.
Despite continued growth in energy and services revenue, the electric vehicle division — the company’s core business — saw steep declines.
Tesla blamed the drop on factory retooling for the updated Model Y, weaker demand, and the growing cost pressures linked to shifting global trade policy.
Political tensions have further complicated Tesla’s position.
Musk’s involvement in DOGE, a Trump administration initiative aimed at cutting federal waste, has drawn protests and violence targeting the brand.
Tesla also acknowledged that changing political sentiment could impact short-term demand, especially in global markets where regulatory environments are shifting quickly.
Musk said during the earnings call that his involvement with DOGE will “drop significantly,” as his special consultant role ends in May.
He plans to spend more time working directly on Tesla’s recovery.
"Starting probably next month, in May, my time allocation to DOGE will drop significantly," Elon Musk says in $TSLA's earnings call.
Earlier, he explained why he was doing the work: "If the ship of America goes down, we all go down with it, including Tesla and everyone else." pic.twitter.com/LkRbiBa7zn
— Yahoo Finance (@YahooFinance) April 22, 2025
Commentary:
This quarter wasn’t just a financial setback for Tesla — it was the culmination of years of political and media attacks now boiling over.
Elon Musk’s decision to fight federal inefficiency through DOGE made him a lightning rod.
The very people who once cheered Tesla as a clean-energy pioneer turned against the company as soon as it challenged the bureaucracy they benefit from.
The protests and vandalism aimed at Tesla facilities weren’t just acts of anger — they were coordinated shows of force from the same class of political elites that enriched themselves through sweetheart deals and wasteful grant schemes.
For years, billions flowed into fake green startups and ESG scams with no real innovation.
Musk disrupted that gravy train, and the backlash has been severe.
While Musk’s work with DOGE may have saved taxpayers untold billions, it came at a massive cost to his company.
His announcement that he’ll now step back from DOGE to focus on Tesla signals a major shift — one that might help steady the ship, but not without sacrifice.
It’s also clear that many in media and government want to destroy Musk’s credibility because of the values he represents: efficiency, accountability, and personal freedom.
The effort to demonize his companies has gone beyond criticism — it’s been a sustained campaign to crush what Tesla symbolizes.
Still, Musk has a track record of defying expectations.
His reengagement at Tesla comes at a time when leadership and vision are needed most.
The core product line is still strong, and if he can refocus the mission, Tesla could yet stage a comeback.
The Bottom Line:
Tesla is facing its hardest financial quarter in years, fueled by declining sales, political attacks, and fallout from Musk’s government reform work.
With his time at DOGE winding down, Musk is pledging to return his full attention to the company.
Tesla’s comeback won’t be easy — but if anyone can drive it, it’s Musk.
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