Analysts suggest Tesla’s significant losses are connected to its CEO’s position as a US government efficiency lead.
Elon Musk, CEO of Tesla and SpaceX, has announced a reduction in his efforts to cut government spending at the Department of Government Efficiency (DOGE), choosing to focus more on his companies. Tesla experienced a large 71% drop in profits and a 9% decrease in revenue for the first quarter of 2025.
Musk clarified that he does not intend to completely abandon his work with DOGE.
During a conference call with analysts on Tuesday, Musk stated that with the “major work of establishing the Department of Government Efficiency” largely finished, he plans to dedicate more time to Tesla and anticipates spending only “a day or two per week on government matters.”
The Texas-based EV manufacturer reported a net profit of $409 million for the first quarter of 2025, a sharp decrease from $1.41 billion in the same period the previous year – marking the largest year-over-year drop in the company’s history. Tesla’s revenue also decreased from $21.3 billion to $19.3 billion between January and March.
Analysts have largely attributed the substantial sales decline in Tesla’s history to Musk’s involvement with DOGE. The tech billionaire has become an increasingly controversial figure due to his close ties to US President Donald Trump and his leadership of the unofficial agency focused on reducing government spending.
Since January, numerous Tesla-related locations across the US and internationally have faced protests. Musk has implied that the campaign could be a coordinated effort funded by major Democratic donors, including George Soros.
During the call, Musk claimed, without providing evidence, that the protests were orchestrated by “those who were receiving the wasteful and fraudulent dollars,” stating that violent attacks against Tesla are being “paid for.”
“I think the right thing to do is fight the waste and fraud and try to get the country back on the right track,” he said. “If the ship of America goes down, Tesla will go with it.”
Musk’s role as a special government employee is scheduled to conclude by late May, after which the billionaire is expected to return to his private ventures. DOGE, created under Trump’s executive order, will remain active until at least 2026.
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