Elon Musk promises less DOGE, more Tesla as profits and revenue go over a cliff

“The large slug of work” establishing the so-called US Department of Government Efficiency (DOGE) for US President Donald Trump had been mostly completed, the Tesla CEO said during the company’s financial results announcement on Wednesday, Australian time.

“Starting probably next month, in May, my time allocation to DOGE will drop significantly,” suggested Musk, who said he expected to continue spending “a day or two per week on government matters” for as long as Trump wanted him to.

While DOGE has faced protests, hackers, and the loss of workers over its slashing of US government jobs and programs in the name of alleged “waste and fraud”, Tesla has also faced public backlash and falling sales over DOGE’s actions and Musk’s ties to Trump.

Musk acknowledged the “blowback” from DOGE during Wednesday’s call, but argued the group’s work was important for fixing a federal deficit he claimed was leading the US “to destruction”.

Tesla Q1 profits slide

Tesla reported a 71% drop in profits to $640 million (US$409m) and a 9% decline in revenue for the first quarter of 2025 compared with Q1 of 2024, falling short of Wall Street expectations.

While the firm’s share price rose more than 5% in after-hours trading in the US, it has dropped almost 40% in the past 12 months.

Musk said he was focused on Tesla’s work on AI-powered autonomous vehicles and humanoid robots, which he argued would “probably” begin to improve the company’s financial results “in a significant way” in 2026.

He also suggested there would be “millions of Teslas operating autonomously” by the second half of 2026 and the company would be producing 1 million Tesla Optimus robots each year as early as 2029.

But many analysts have cast doubt on these suggestions, citing Musk’s history of over-promising.

‘Tariffs and brand image’ hit bottom line

Tesla’s chief financial officer, Vaibhav Taneja, told Wednesday’s conference call that the company faced “near-term challenges in our business due to tariffs and brand image”.

Tesla has witnessed anti-Musk and anti-Trump protests at some of its stores in recent months, which Taneja said had impacted the company’s brand.

“The negative impact of vandalism and unwarranted hostility towards our brand, and our people, had an impact in certain markets,” he said.

Musk alleged, without evidence, that protests against Tesla had been “paid for” by an unspecified entity using “fraudulent” funds.

Tesla executives said the company also faced headwinds from volatile Trump administration tariffs, which are expected to increase prices for imported goods in the US.

Tesla has previously said it would not be as impacted by tariffs as other companies because it manufactures most of its US cars domestically, but tariffs will still increase its costs for parts imported from other nations.

Musk, who has been publicly critical of Trump’s tariffs, said their implementation was up to the president.

“I will weigh in with my advice, with the president,” he said, “which he will listen to my advice, but it’s then up to him, of course, to make his decision.”

Taneja said Tesla was working on establishing additional supply chain systems outside of China — which currently faces a 145% tariff — but said this would “take time”.

Meanwhile, the company was still focused on producing cheaper models, Taneja said, including a cheaper version of its Model Y.

‘Unexpected bumps’

As Tesla plans to launch a paid driverless robotaxi service in Austin in June and in other US cities later this year, it also faces regulatory investigations over the safety of its autonomous driving technologies, which have been found to have contributed to some accidents in low-visibility conditions.

The company is also facing competition from Chinese EV makers such as BYD, while European care brands are improving their EV lineups.

It was “a challenging time” for Tesla, said Musk, who added there would “probably be some unexpected bumps this year”.

He encouraged investors to “look beyond the bumps and potholes” immediately ahead.

Wedbush Securities technology analyst Dan Ives said investors “needed to hear” that Musk was putting more of his focus back on Tesla.

“To me, the most important thing to me on this call is not numbers — it’s Musk, on the call, recommitting to Tesla as a CEO,” he told CNBC.