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BY Kofi Oppong Kyekyeku, 8:54am April 23, 2025,

After Tesla’s profit nosedive, Elon Musk vows more time at the wheel

by Kofi Oppong Kyekyeku, 8:54am April 23, 2025,
Elon Musk
Elon Musk - Photo credit: Bret Hartman/TED

Elon Musk is signaling a recalibration of priorities, shifting focus back to Tesla following a rocky first quarter marked by a steep drop in profits, weakened vehicle demand, and a controversial stint in government reform.

After Tesla’s earnings report revealed a dramatic 71% plunge in profits and a 9% fall in revenue, Musk told analysts on a Tuesday conference call that his time in Washington, leading the Department of Government Efficiency (DOGE), would soon take a back seat. With what he called the “major work of establishing the Department of Government Efficiency” now completed, Musk said he plans to devote significantly more time to Tesla starting in May. He clarified that his engagement in government-related activities would be scaled back to just one or two days a week.

Tesla’s disappointing results come amid backlash over Musk’s leadership of DOGE, a polarizing, cost-cutting agency that has divided public opinion. The electric vehicle maker is also contending with increasing competition, growing safety concerns over its self-driving tech, and waning consumer confidence, particularly in Europe.

READ ALSO: “This level of violence is insane and deeply wrong” – Elon Musk reacts to Tesla attacks

Wedbush Securities analyst Dan Ives noted that Tesla investors were eager for Musk to recommit to the company and described the shift as a major step forward.

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In after-hours trading, Tesla shares jumped over 5%, though the stock remains down more than 40% for the year.

Despite the downturn, Tesla reaffirmed key milestones on the horizon. The company is still on track to launch a more affordable version of the Model Y SUV in the first half of the year. It also maintained its timeline for deploying a paid driverless robotaxi service in Austin by June, with the goal of scaling autonomous operations across much of its fleet by 2026.

Musk expressed confidence in the rollout, stating that millions of Teslas would be operating autonomously in the second half of the year. He also stated his belief that passengers would soon be able to sleep during rides and wake up at their destination in many U.S. cities before year’s end.

However, Sam Abuelsamid, an auto analyst at Telemetry Insight, challenged Musk’s optimism. He argued that the autonomous system is still prone to frequent, critical errors that prevent it from functioning unsupervised and warned that such glitches could easily lead to crashes.

Federal scrutiny of Tesla’s self-driving technology continues. Regulators are investigating Autopilot, the driver-assistance system that allows partial control but still requires human supervision, to determine whether it provides adequate warnings when driver attention lapses. Full Self-Driving, Tesla’s premium, but misleadingly named system is also under investigation for links to crashes, especially in low-visibility situations such as intense sun glare.

The robotaxi model, designed without a steering wheel or pedals, is especially controversial given these ongoing safety concerns.

READ ALSO: What experts are saying after Trump bought a Tesla to support Elon Musk

Tesla’s once-commanding lead in the EV market is also being challenged by foreign competitors. Chinese automaker BYD recently unveiled a revolutionary battery that charges in minutes, while European brands have rolled out EVs with cutting-edge features that are luring buyers away from Tesla. Musk’s vocal support for far-right political figures has further eroded Tesla’s appeal, especially in European markets.

Tesla reported first-quarter profits of $409 million, down from $1.39 billion a year earlier and earnings per share of 12 cents, missing Wall Street estimates. Revenue fell to $19.3 billion from $21.3 billion, while gross margins narrowed from 17.4% to 16.3%.

While Tesla is less exposed to U.S. tariffs due to its domestic manufacturing base, it still imports some vehicle materials that are now subject to additional taxes. The company also noted that tariffs would impact its energy storage segment.

Meanwhile, Chinese retaliation against U.S. trade measures has taken a toll. Tesla recently halted new orders from mainland China for its premium Model S and Model X vehicles. The company continues to produce the Model Y and Model 3 for the Chinese market at its Shanghai factory.

One bright spot in the earnings report was Tesla’s regulatory credit business, which generated $595 million in sales, up from $442 million a year ago. The company also saw a year-over-year jump in cash flow to $2.2 billion from $242 million.

Morningstar analyst Seth Goldstein said the poor results were expected, given prior reports of declining deliveries. He added that positive cash flow was a reassuring sign despite the overall slump.

READ ALSO: Elon Musk denies blame for federal worker firings, says agencies made the cuts

Last Edited by:Kofi Oppong Kyekyeku Updated: April 23, 2025

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