Elon Musk, the CEO of Tesla, announced he will reduce his role in US government work. This comes as Tesla faces big problems. In early 2025, the company reported a drop in earnings and a sharp fall in car sales.
Musk had been active in politics through a new group called the Department for Government Efficiency, or “Doge.” He joined this group last year to help cut federal spending and change how public jobs work. But now, he says he will spend much less time on this.
Starting next month, Musk will only work one or two days a week on Doge duties. That is, if the president thinks it is helpful. He said, “My time with Doge will drop significantly.”
Backlash Over Politics Hurts Tesla
Musk’s work in government has not been popular everywhere. His political role caused protests. Some customers also started to boycott Tesla products, especially outside the United States.
Tesla said these events hurt the company. Customers around the world started to see Tesla in a new light. And that light was not always positive.
Tariffs Add More Trouble
On top of the backlash, Tesla is dealing with a tough economy. President Donald Trump brought back tariffs against China. These tariffs make it more expensive for companies that use parts from China.
Tesla builds its cars in the US, but many parts come from China. The new trade rules make things harder. Costs are rising fast.
Tesla released a statement saying these “fast-changing trade policies” make it hard to plan. They also drive up costs. Company leaders said this could hurt how many people buy Tesla cars in the short term.
Elon Musk has clashed with Trump’s team before. One of the most vocal people was Peter Navarro, an economic advisor. Navarro once said Tesla was more like a car assembler than a real automaker. Musk fired back by calling Navarro a “moron.”
Still, Musk admits tariffs are a problem. He said Tesla feels them less than others, thanks to factories in Europe, China, and North America. But even with that edge, he said tariffs “remain a serious challenge.”
Musk added, “I’ll keep pushing for reduced tariffs, not increased ones, but that’s all I can do.”
Falling Sales and Stock Prices
Tesla’s troubles don’t stop at tariffs. The company saw its lowest car sales in three years. Sales were down 13% for the quarter.
Because of this, Tesla’s stock price has taken a hit. In 2025, the stock has dropped about 37%. That’s a big fall.
After the recent earnings report, the stock went up a bit in after-hours trading. It rose by about 5%. But investors are still very cautious.
Dan Coatsworth, a financial expert at AJ Bell, said people were not expecting much. “Expectations were extremely low,” he said. He also said Tesla is fighting tough competition and unstable global supply chains. Trump’s trade moves add even more risk.
“Tesla’s issues are stacking up,” Coatsworth added.
Voices From Inside and Outside Tesla
One former Tesla leader gave his thoughts. Georg Ell once ran Tesla’s work in Western Europe. He is now CEO of a software company called Phrase.
Ell said Musk should focus more on his companies. “People will return to the value of Tesla’s products if Elon focuses where he is best,” Ell said.
He also mentioned Musk’s leadership style. He said Musk does not often take advice from people who disagree with him. Instead, he follows his own plans with great energy.
AI and the Future of Tesla
Even with all these problems, Tesla still has hope. The company is betting on artificial intelligence (AI) to grow. It hopes AI will help with both cars and new software tools.
But experts say investors have heard this before. Some think Tesla talks a lot about the future but has trouble with today’s problems.
Tesla has been a leader in electric cars. But other car companies are now catching up. Some offer cheaper cars. Others have new features. Tesla must now compete harder than ever before.
Musk stepping back from Doge could be good for Tesla. It may help him focus on the company’s core business. Right now, Tesla needs attention.
With sales down and trade rules changing, the road ahead is not easy. But if Tesla can keep improving its products and lower its costs, it might still lead the electric car market.
Musk’s next moves will be watched closely. Investors, workers, and customers all want to know if he can steer Tesla back to growth.