Tesla’s latest earnings report just dropped, and the numbers are rough. The electric car giant posted a 71% drop in net income for the first quarter, sending shockwaves through investors and sparking big questions about Elon Musk’s recent political entanglements — especially his time with the Trump administration.
On an earnings call Tuesday, Musk admitted 2025 has already been a bumpy road. “There will probably be some unexpected bumps this year,” he said. Still, ever the optimist, he added, “I remain extremely optimistic about the future of the company.”
But Wall Street isn’t exactly vibing with optimism right now.
Deliveries are down 13% compared to last year. Tesla blames part of that on temporary factory upgrades for the new Model Y. But analysts and critics are pointing to something bigger: mounting backlash as Musk grows increasingly tied to Donald Trump’s administration, specifically the controversial federal downsizing initiative known as DOGE.
The result? A perfect storm of trade tariffs, political polarization, and customer disillusionment.
Tesla noted that “rapidly evolving trade policy” is hurting its global supply chain. Even though it builds cars in the U.S., the company still relies heavily on imported parts — parts now slapped with higher tariffs under Trump’s economic policies.
“I’ve said many times, lower tariffs are better for prosperity,” Musk said. “But the decision ultimately belongs to the president.”
The political fallout is hitting Tesla hard. Protests. Vandalized dealerships. And public perception of Musk? It’s in the red. Polls from Pew and CNBC suggest nearly half of Americans view him negatively — a dramatic shift for someone who once enjoyed rockstar status among tech fans and environmentalists.
Tesla’s stock is down nearly 50% since December. Analysts are calling it a turning point — especially if Musk can’t decide where he belongs: at Tesla or in Washington.
“Tesla is Musk and Musk is Tesla,” said Daniel Ives of Wedbush Securities. “If Musk stays in the White House, Tesla suffers. If he comes back full-time, the long-term story remains intact.”
Read Also: Elon Musk Loses a Billion Dollars Every Time the Tesla Stock Drops by $2.43
On Tuesday, Musk gave the clearest signal yet: he’s getting ready to scale back his time in D.C.
“My time allocation to DOGE will drop significantly,” he said, adding he’ll likely spend “a day or two a week” on government matters moving forward. Trump, for his part, has hinted that Musk’s role may be winding down, saying, “I’ll keep him as long as I could keep him.”
By law, Musk can only serve 130 days a year as a special government employee. That cap runs out in late May.
Still, amid all this drama, Tesla says it’s pushing ahead. The company is on track to launch new, more affordable vehicles in the first half of 2025. It’s also betting big on its future tech portfolio:
- Musk says robotaxis will roll out in Austin this June.
- He’s confident Tesla vehicles will be able to drive themselves “while you sleep” by the end of the year.
- And he claims thousands of Tesla’s Optimus humanoid robots will be working in factories before 2026 — with a goal of hitting 1 million robots per year by 2030.
Bold promises. But as history has shown, Musk’s timelines are… flexible. He first said Tesla would have self-driving cars by 2018 and robotaxis by 2020. Neither has fully materialized.
Still, after the earnings call, Tesla stock bounced up 5% in after-hours trading — a sign that investors might be clinging to Musk’s long-term vision, even as the short-term gets murky.
So what’s next for Tesla? That all depends on how much time Elon Musk spends in the driver’s seat — and how much he spends in Washington.
