Musk announces he will cut back on work for DOGE after Tesla's earnings plunged in Q1

Tycoon Elon Musk announced Tuesday that he will cut his job at the Department of Government Efficiency (DOGE) after Tesla's earnings plummeted in this first quarter of 2025.

"I'll have to continue doing it for I think the remainder of the President's term just to make sure the waste and fraud that we stopped does not come roaring back, which it will do if it has the chance," Musk said in a statement. "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 would be useful."

According to various reports, Tesla is suffering at an accelerated pace from the impacts of the trade war spurred by the US-China tariffs and criticism of its owner, who has played a central political role in President Donald Trump's election campaign and administration, being recognized as the 'Czar of cuts.'

For a broad array of reasons - declining sales, rising production costs due to tariffs, increased foreign competition, and the "bad image" Musk himself has generated due to his political activism - Tesla's profits plummeted 71% in the first quarter of 2025.

According to the Wall Street Journal, the numbers reflect that Tesla reported adjusted earnings per share of 27 cents, well below experts' expectations, which had forecast earnings of 41 cents per share.

Also, the electric car maker's revenue fell 9% year-on-year to $19.3 billion after car sales slumped in key markets such as the U.S., China, and Germany.

In addition, Tesla faces 25% tariffs on automotive imports. While the company produces its vehicles for the U.S. market in Texas and California, it relies on neighboring countries for many of its parts, especially Mexico, which provides more than 20% of components, according to official data.

This, taken together, causes Tesla to have an operating margin of 2.1% in the quarter, down from 5.5% last year, indicating a sharp drop in its profitability. This data reveals that the company earned much less for every dollar brought in due to higher costs, lower revenues, or both.

According to analysts, there are several reasons behind the drop in sales. For example, Musk's image in Europe and the U.S. has deteriorated in a sector of the public, even to the point that his most violent critics crossed the line and began vandalizing its stores and charging stations.

However, there are not only negative factors behind the drop in sales, as automotive industry experts highlighted that many Tesla customers probably postponed their purchases in view of the imminent arrival of a revamped version of the Model Y, the manufacturer's most popular and best-selling model.

But beyond this detail, analysts agree that the manufacturer is going through a very difficult period. For example, in China, Tesla's shipments fell by approximately 22% in the quarter, and in Germany, deliveries plunged by as much as 62%.

Despite the sharp drop in sales and profits, Tesla highlighted a not insignificant positive: its energy storage and software subscriptions businesses grew at double-digit rates in the first quarter. The company also continues to bet heavily on artificial intelligence, considered key to its future growth, especially in the development of autonomous vehicles and software-based services, as stated by Musk himself on several occasions.