Looking down the barrel of a tough year post a rough first quarter, billionaire Elon Musk wasted no time on Tesla’s (TSLA) earnings call Tuesday, acknowledging the EV maker’s biggest roadblock ahead.
It’s not Trump tariffs, although they will prove far from a friend.
The real issue is the outsized time he’s spending as President Trump’s controversial DOGE master. And he finally clearly articulated what must be done to jumpstart an automaker that saw sales tank 9% from the prior year and margins fall off a cliff.
Listen: what Trump tariffs mean to semiconductors
“Starting in May my time allocation to DOGE will drop considerably,” Musk said on the call.
The path to renewed sales and profit growth won’t be easy, however.
The Tesla brand will likely continue to feel blowback from Musk’s outspokenness on government policies. At the same time, tariff policy stands to hammer margins given Tesla’s exposure to solar panels from China and autos being made outside the US.
The uncertainty on how quickly the more engaged Musk can fix Tesla is something execs pointed to on the earnings release – Tesla yanked its 2025 financial guidance, promising to revisit it when second quarter results hit.
Shares rose 7% in pre-market trading on Wednesday as the bulls cheered Musk’s comments on his government work. The company’s ticker page was the number one most active.
At close: April 22 at 4:00:01 PM EDT
Here’s what you need to know in the wake of Tesla’s earnings report.
-
Musk still said he plans to spend one to two days on his DOGE role. That commitment could extend through the length of Trump’s term as president.
-
Musk said he remains an advocate of “lower tariffs” and will continue to make that case to Trump.
-
Tesla hasn’t disclosed any definitive financial impact from Trump’s tariffs or the US-China trade war. The company faces multiple exposures, from its Mexico plant and China operations to sourcing materials for its solar business.
-
Musk says the company is on track to launch a paid ride-hailing service in Austin in June. Ride-hailing not expected to be “material” to profits until mid-2026, says Musk.
-
Execs said on the earnings call “vandalism” to Tesla cars due to Musk’s government involvement has hurt demand in “certain” markets.
“It is very likely Tesla will take a pause with its AI Investments. In 2024 Tesla invested between $3 billion and $4 billion, and so far those investments have resulted in “zero” results – just lab experiments. At the start of 2025, Tesla indicated that they will keep their AI Investments at the same level as 2024.” -Global Equities Research analyst Chip Chowdry
