{"id":10830,"date":"2025-04-24T19:32:27","date_gmt":"2025-04-24T11:32:27","guid":{"rendered":"https:\/\/tingchao.xyz\/?p=10830"},"modified":"2025-04-24T19:32:32","modified_gmt":"2025-04-24T11:32:32","slug":"musk-does-damage-control-after-tesla-earnings-plunge","status":"publish","type":"post","link":"https:\/\/tingchao.xyz\/?p=10830","title":{"rendered":"Musk does damage control after Tesla earnings plunge"},"content":{"rendered":"\n
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Elon Musk is in damage control mode at Tesla as the company\u2019s disappointing earnings force the tech billionaire to reevaluate his focus between his businesses and role in the Trump administration.<\/p>\n\n\n\n

Faced with a 71-percent plunge in first-quarter earnings, the Tesla CEO tried to assure investors Tuesday he will soon spend less time working on President Trump\u2019s so-called Department of Government Efficiency (DOGE) cost-cutting efforts and focus more on his company.<\/p>\n\n\n\n

\u201cStarting probably in [the] next month, May, my time allocation to DOGE will drop significantly,\u201d Musk said at the start of Tesla\u2019s earnings call Tuesday.<\/p>\n\n\n\n

Musk\u2019s special government status is set to end May 30, though there have been open questions about how long his White House presence would last. The billionaire made clear Tuesday he is at a crossroads amid ongoing backlash over DOGE.<\/p>\n\n\n\n

\u201cMore important than numbers, this was the time Musk could pivot, speak to shareholders\/employees, and take a turn away from the DOGE\/Trump White House and recommit as CEO of Tesla\u2026and he did it loudly and clearly in a conference call that we view as a turning point in the Tesla story,\u201d Wedbush Securities analysts wrote in an investors note Wednesday.<\/p>\n\n\n\n

Flexport CEO joins “The Hill on NewsNation” to talk tariffs<\/p>\n\n\n\n

Musk\u2019s comments came about an hour after Tesla released its first quarter earnings, which totaled $409 million, or 12 cents per share, in the first three months of this year. The company\u2019s revenue also fell 9 percent to $19.3 billion, far lower than analysts\u2019 expectations.<\/p>\n\n\n\n

Musk opened Tuesday\u2019s earnings call immediately acknowledging the blowback he is facing over DOGE\u2019s work, which is driving mass layoffs at federal agencies and program spending cuts.<\/p>\n\n\n\n

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After about three months of leading the DOGE efforts, Musk said the \u201cmajor work\u201d of establishing DOGE is done, giving him the ability to shift his time to Tesla.<\/p>\n\n\n\n

\u201cI think I\u2019ll continue to spend a day or two per week on government matters for as long as the president would like me to do so and as long as it is useful,\u201d he told investors. \u201cBut starting next month, I\u2019ll be allocating probably more of my time to Tesla.\u201d<\/p>\n\n\n\n

While Tesla was expected to have disappointing numbers given its market performance this year, some observers said the drop was larger than anticipated.<\/p>\n\n\n\n

\u201cEverybody expected there to be some negative effect on Tesla\u2019s brand image, but it was just sort of the scale that took many people off guard,\u201d said Maxwell Shulman, an analyst at Beacon Policy Advisers.<\/p>\n\n\n\n

Nonetheless, market analysts saw Musk\u2019s comments as an optimistic sign for Tesla and its stock, which has dropped nearly 50 percent since December. Tesla\u2019s shares rallied on Wednesday, jumping 6 percent following the earnings call.<\/p>\n\n\n\n

William Blair & Co. analysts attributed Musk\u2019s DOGE announcement as the \u201clargest component\u201d in shares rallying Wednesday morning.<\/p>\n\n\n\n

Wedbush analysts predicted the move will eliminate the \u201cbrand damage\u201d caused by Musk and DOGE in recent months, calling the tech leader\u2019s remarks \u201cthe biggest and best possible news\u201d for Tesla investors.<\/p>\n\n\n\n

Tesla became a political target this year as demonstrators targeted their criticism of Musk and DOGE on the company, protesting at showrooms or charging stations across the country. Most of the protests were peaceful, though some involved violence, including arson attacks or shootings.<\/p>\n\n\n\n

Tesla\u2019s stock continued to plummet amid the protests and earlier this month, the company confirmed sales dropped by nearly 13 percent in its worst showing since 2022.<\/p>\n\n\n\n

Investors increasingly voiced concerns about how Musk\u2019s political involvement would pose issues for his companies.<\/p>\n\n\n\n

And hours before the earnings call, a group of eight state treasurers wrote to Tesla Chair Robyn Denholm expressing concerns the company\u2019s recent difficulties suggest \u201cdeeper governance and leadership challenges\u201d that could ultimately affect their states.<\/p>\n\n\n\n

\u201cCEO Elon Musk continues to divide his attention across multiple companies and a high-profile advisory role within the federal government,\u201d they wrote. \u201cThese external commitments raise serious questions about whether Tesla\u2019s leadership is fully engaged in addressing the company\u2019s core challenges.\u201d<\/p>\n\n\n\n

Morningstar analyst Seth Goldstein said Musk\u2019s decision to reduce his DOGE role should be enough to alleviate concerns.<\/p>\n\n\n\n

\u201cIt\u2019s Elon speaking to his investor base and reassuring them that he is still leading the company, that he\u2019s still focused on Tesla,\u201d Goldstein told The Hill, adding, \u201cAs these questions have remained as he\u2019s been still a key advisor, I think he just wanted to clarify that Tesla\u2019s still his main focus.\u201d<\/p>\n\n\n\n

Goldstein likened Musk\u2019s involvement DOGE to his takeover of the social media platform X, then known as Twitter. Musk still owns X and uses it as a primary vehicle to voice support for Trump and his policies.<\/p>\n\n\n\n

\u201cDuring the first few months after that deal closed, he spent more time at Twitter, a little less time at Tesla and wanted to make sure things were running well,\u201d Goldstein told The Hill. \u201cAnd then he eventually stepped back and started spending more time with Tesla.\u201d<\/p>\n\n\n\n

President Trump said last month he expects Musk to eventually return to his companies after his work with DOGE, though a timeline for that transition was not previously given. The Hill reached out to the White House for comment on Wednesday.<\/p>\n\n\n\n

Other observers like Shulman do not believe Musk\u2019s comments are enough to reverse direction at Tesla.<\/p>\n\n\n\n

\u201cNegative polarization is an extremely potent political force in the modern era,\u201d Shulman said. \u201cThe urge just to sort of take on the opposite of whatever your opponents are doing and Musk\u2019s avid connection to the administration, will make it hard for prospective buyers to sort of untangle his association with Republicans and Donald Trump going forward.\u201d<\/p>\n\n\n\n

\u201cReturning to the office one or two days a week isn\u2019t necessarily going to fully right the ship by itself,\u201d Shulman added.<\/p>\n\n\n\n

In the short term, Tesla still faces the fallout from Trump\u2019s ongoing trade war.<\/p>\n\n\n\n

Musk acknowledged on Tuesday that Tesla is the least impacted car company by the tariffs given its localized supply channels, but that the import taxes can impact a company when margins are low.<\/p>\n\n\n\n

He emphasized to investors he is an advocate for lower tariffs and voices this to the president, but that the decision is ultimately up to Trump.<\/p>\n\n\n\n

Despite its current headwinds, Musk said he is \u201cextremely optimistic\u201d about the future of the company, pointing to Tesla\u2019s plans for large-scale autonomous cars and autonomous humanoid robots.<\/p>\n","protected":false},"excerpt":{"rendered":"

Elon Musk is in damage control mode at Tesla as the company\u2019s disappointing earnings force the tech billionaire to reevaluate his focus between his businesses and role in the Trump administration. 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