Tesla Profits Plummet 71% but Stock Jumps as Musk Vows to Reduce DOGE Involvement

Elon Musk’s Tesla suffered a massive 71 percent drop in profits for the first quarter, but the company’s shares reacted positively on Wednesday morning after Musk pledged to decrease his time spent working with the federal government on DOGE, but not halt his involvement entirely. Musk also continued his criticism of Donald Trump’s tariffs on China during his earnings call with analysts.

CNBC reports that Tesla, the electric vehicle giant, has reported a staggering 71 percent year-over-year plunge in net income, accompanied by a 20 percent drop in revenue from car sales, according to its latest quarterly earnings report. The company’s deliveries in the first quarter of 2025 were down 13 percent from the previous year, marking the most significant quarterly decline in sales in Tesla’s history. This contrasts with the overall electric vehicle market, which saw a seven percent increase during the same period. Despite the dismal numbers, shares of Tesla have jumped almost eight percent in morning trading today.

On a call with investors and analysts, CEO Elon Musk addressed concerns about his involvement with the federal government, particularly his work with DOGE. Musk defended his efforts, stating, “If the ship of America goes down, we all go down with it.” However, he acknowledged that he would be reducing his time spent on DOGE work, as the majority of the task was “mostly done.” Musk committed to dedicating a day or two per week to government matters for the remainder of the president’s term, as long as it remains useful.

Musk dismissed protests against Tesla as being “paid for.” He also maintained that demand for the company’s vehicles remains strong, despite the significant drop in sales. Analysts have pointed to multiple factors contributing to the poor sales performance, including customers waiting for the refreshed Model Y and the potential impact of Musk’s controversial political work on Tesla’s brand reputation.

Surveys have indicated that Musk’s involvement in politics has harmed Tesla’s brand, and the company’s showrooms have been the target of frequent protests and domestic terrorism attacks in recent months. Some leftist consumers have been deterred from purchasing Tesla vehicles due to the perception that driving one signals support for Musk and President Trump.

In addition to the challenges posed by Musk’s political activities, Tesla faces other headwinds. The value of used Tesla EVs have fallen by 10.1 percent over the past 12 months, according to data from iSeeCars.com, while used car prices in general have risen by one percent. This decline in value not only affects current Tesla owners but also directly impacts the company, as it owns a substantial number of its own vehicles through leasing arrangements.

Despite these setbacks, Musk remains confident in Tesla’s long-term profitability, which he believes relies on robotaxis and autonomous robots rather than conventional car sales. He also dismissed concerns about competition from Chinese companies in the AI sector, stating that he is confident Tesla will have the world’s best AI technology.

Investors, such as analyst Dan Ives, have emphasized the importance of Musk refocusing his attention on Tesla’s business. Ives views Musk’s commitment to reducing his involvement in DOGE as a positive sign, marking “the beginning of the end of his time in the Trump White House.”