By Akash Sriram, Abhirup Roy and Chris Kirkham
(Reuters) – Tesla CEO Elon Musk said on Tuesday he would cut back significantly the time he devotes to the Trump administration from next month and spend more time running his many companies.
The move comes as Musk’s involvement in the so-called Department of Government Efficiency – where he has led efforts to cut federal jobs – has become a political lightning rod, fueling unrelenting protests and vandalism at Tesla showrooms. Investors have raised concerns about Musk spending too little time managing Tesla, where sales have nosedived.
“The large slog of work necessary to get the DOGE team in place and working with the government to get the financial house in order is mostly done,” Musk told analysts on a conference call. But he said he still intended to spend some 40% of his time on DOGE.
Tesla shares, which had risen 4% in after-hours trading right before an earnings conference call began, spiked to trade up 5.5% on Musk’s comments. The stock has nearly halved from its December peak.
After market close on Tuesday, Tesla reported profitability for its core auto business that topped rock-bottom expectations and said it was on track to produce an affordable car.
But the EV maker said it would have to reassess its growth forecast in three months because it was “difficult to measure the impacts of shifting global trade policy on the automotive and energy supply chains” and that “changing political sentiment, could have a meaningful impact on demand for our products in the near-term,” it said.
Tariff tensions add further uncertainty. Tesla has paused some China-sourced component imports after U.S. tariffs on the Asian country rose to 145%, Reuters reported. China has responded with tariffs of its own, leading Tesla to suspend new Model S and Model X orders in the country.
Musk, who said on Tuesday he continued to support lower tariffs, added that Tesla was not immune to “macro demand for cars,” adding that economic uncertainty causes people to want to “pause on doing a major capital purchase like a car.”
“Absent the macro issues, we don’t see any reduction in demand,” he said. But tariffs will have an outsized impact on Tesla’s energy business, he said.
While the stronger-than-expected margin in the first quarter – driven by lower costs – offered some relief, Tesla’s auto revenue still slumped by a fifth in the period, and net profit plunged 71%. These metrics both missed Wall Street estimates.