Faced with a 71 percent plunge in first-quarter earnings, the Tesla CEO tried to assure investors Tuesday he will soon spend less time working on President Trump’s so-called Department of Government Efficiency (DOGE) cost-cutting efforts and focus more on his company.
“Starting probably in [the] next month, May, my time allocation to DOGE will drop significantly,” Musk said at the start of Tesla’s earnings call Tuesday.
Musk’s special government status is set to end May 30, though there have been open questions about how long his White House presence would last.
The billionaire made clear Tuesday he is at a crossroads amid ongoing backlash over DOGE.
“More important than numbers, this was the time Musk could pivot, speak to shareholders/employees, and take a turn away from the DOGE/Trump White House and recommit as CEO of Tesla...and he did it loudly and clearly in a conference call that we view as a turning point in the Tesla story,” Wedbush Securities analysts wrote in an investors note Wednesday.
Musk’s comments came about an hour after Tesla released its first quarter earnings, which totaled $409 million, or 12 cents per share, in the first three months of this year.
Musk opened Tuesday’s earnings call immediately acknowledging the blowback he is facing over DOGE’s work, which is driving mass layoffs at federal agencies and program spending cuts.
After about three months of leading the DOGE efforts, Musk said the “major work” of establishing DOGE is done, giving him the ability to shift his time to Tesla.
“I think I’ll continue to spend a day or two per week on government matters for as long as the president would like me to do so and as long as it is useful,” he told investors. “But starting next month, I’ll be allocating probably more of my time to Tesla.”
While Tesla was expected to have disappointing numbers given its market performance this year, some observers said the drop was larger than anticipated.
“Everybody expected there to be some negative effect on Tesla’s brand image, but it was just sort of the scale that took many people off guard,” said Maxwell Shulman, an analyst at Beacon Policy Advisers.
Nonetheless, market analysts saw Musk’s comments as an optimistic sign for Tesla and its stock, which has dropped nearly 50 percent since December. Tesla’s shares rallied on Wednesday, jumping 6 percent following the earnings call.
William Blair & Co. analysts attributed Musk’s DOGE announcement as the “largest component” in Tesla's Wednesday market performance.
Wedbush analysts predicted the move will eliminate the “brand damage” caused by Musk and DOGE in recent months, calling the tech leader’s remarks “the biggest and best possible news” for Tesla investors.
