Tesla's net income plunges 71% as Elon Musk confirms ‘major work' setting up DOGE is done
Elon Musk said Tuesday he would dial back his role as President Trump's cost-cutting czar — sending beaten-down Tesla shares surging despite the company reporting that its net income cratered 71% for the quarter.
The embattled billionaire told analysts on a post-earnings call that his 'time allocation to DOGE will drop significantly,' referring to the polarizing Department of Government Efficiency.
'I will be allocating far more of my time to Tesla now that the major work of establishing the Department of Government Efficiency is done,' he said after the markets closed..
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Shares rose 4% in after-hours trading as Musk delivered the news to analysts, many of whom have attributed Tesla's struggles to public backlash from the mogul's close ties to Trump and tough overseas competition.
Musk insisted he would continue to work with the administration to combat 'waste and fraud' and would 'spend a day or two per week on government matters for as long as the president would like me to do so.'
As The Post has reported, Musk's exit was already in the works due to federal rules that mandate special government employees (SGEs) can only remain at their post for 130 consecutive days. That would place his last day on May 30.
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3 Elon Musk is working closely with President Trump.
AP
His return to fully focusing on Tesla can't come fast enough.
Shares are down nearly 40% year-to-date. They closed at 237.97 on Tuesday, below the 242.84 the stock fetched the day before Trump won the election. It had soared to 479.86 in mid-December.
The EV pioneer suffered significant sales declines in some of its biggest markets, including Democrat-heavy California, the nation's largest EV market, according to the California New Car Dealers Association. It's market share for all EV registrations in the Golden State dropped to 44%, compared with 56% the previous year, the trade group reported.
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Sales have also plummeted in China because of Trump's trade war, as well as Europe after Musk voiced support for right-wing political candidates.
The company has even had some of its cars, stores and charging stations vandalized or set on fire.
Musk acknowledged on the earnings call that Tesla had faced 'some blowback' and said the protests the company has faced as 'very organized.'
'The actual reason for the protests is that those receiving the waste and fraud wish to continue receiving it,' Musk said on the earnings call.
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The electric car maker reported adjusted earnings per share of 27 cents – below Wall Street's expectations of 39 cents per share, according to LSEG data.
3 Tesla dealerships have faced a wave of vandalism.
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Overall revenue plunged 9% to $19.34 billion.
While Tesla has earlier predicted a return to full-year sales growth, the company took a step back in its earnings release, noting that it will revisit 2025 guidance in its second-quarter update.
'It is difficult to measure the impacts of shifting global trade policy on the automotive and energy supply chains, our cost structure and demand for durable goods and related services,' Tesla said in an earnings release.
Automotive revenue plunged 20% to $14 billion, down from $17.4 billion one year ago. Tesla's energy business was a bright spot, growing 67%.
Gross margins for Tesla's auto business came in slightly better than expected, hitting 12.5%.
Investors have been bracing for dismal results ever since Tesla revealed earlier this month that its first-quarter deliveries had plunged by 13% compared to the same quarter one year ago.
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Total deliveries, which are seen as a close proxy for final sales, were 336,681 – far lower than Wall Street expected.
3 Tesla shipments fell 13% in the first quarter.
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At the time, Wedbush analyst Daniel Ives described the delivery numbers as a 'disaster on every metric.'
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The billionaire has scrambled to reassure Tesla employees during the recent rough patch in the company's performance, telling them during an all-hands meeting last month to 'hang on to your stock.'
Elsewhere, Tesla and other automakers are set to be walloped by Trump's trade tariffs.
'Uncertainty in the automotive and energy markets continues to increase as rapidly evolving trade policy adversely impacts the global supply chain and cost structure of Tesla and our peers,' Tesla said.
The president has imposed 25% tariffs on imported cars and car parts. While Tesla builds all its US-sold cars within the states, it still sources key car components from Mexico and China.
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Earlier this week, Reuters reported that Tesla had halted shipments of parts needed for its upcoming Cybercab and Semi electric truck from China due to the tariffs.
Chinese EV maker BYD recently surpassed Tesla with more than $100 billion in sales and is eyeing a major international expansion.
With Post wires
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