Tesla shares gained significant ground on Wednesday, despite a tough first quarter. Investors showed optimism after Elon Musk’s announcement regarding his government involvement.
Musk to Cut Back on Government Role
During Tesla’s earnings call, Musk shared plans to reduce his time with DOGE, the Department of Government Efficiency. Starting in May, he will shift more of his attention back to Tesla. This move follows criticism of Tesla’s government ties, which many say have damaged the company’s brand image.
Musk emphasized that DOGE had already fulfilled much of its mission. The team reportedly saved $160 billion by slashing federal waste. As a result, Musk now plans to work with DOGE just one or two days per week.
Stock Rebounds After Protests and Pressure
Tesla’s stock had fallen sharply this year, tumbling over 40% before the recent bounce. Public protests had erupted over Musk’s political ties, particularly his support for Donald Trump. Critics argued that Tesla’s government ties were hurting the brand.
On the call, Musk said the backlash stemmed from individuals losing access to “wasteful dollars.” He described the protests as organized efforts by those who benefited from the inefficiencies DOGE had eliminated.
Weak Q1 Performance Revealed
While investors celebrated Musk’s shift in focus, Tesla’s financials told a different story. First-quarter revenue dropped 9.2% year-over-year to $19.3 billion. Automotive revenue alone fell 20%. Meanwhile, vehicle deliveries slipped 13% to 336,681 units.
Production numbers also declined, with 362,615 vehicles built during the quarter. Net income dropped sharply to $409 million, compared to $1.39 billion last year. Adjusted earnings landed at $0.27 per share, missing expectations of $0.42.
Looking Ahead
Despite the disappointing earnings, many believe the company is poised for a comeback. Musk’s renewed focus on Tesla may help repair public perception and boost operations. The market has responded positively, seeing promise in the leadership shift.
Still, Tesla’s government ties remain a point of controversy. Moving forward, how the company manages its image and production goals will be critical. Investors now watch closely to see if this momentum can continue.
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