Musk “Reduce government duties and focus on Tesla”…A statement to return to the main business due to poor performance

Elon Musk Tesla CEO who announced intention to return to main business (Source: AFP)

Elon Musk, Tesla CEO, announced that he will refocus on Tesla management from next month. This statement came as Tesla's first-quarter performance fell significantly short of market expectations, formalizing Musk's position to step back from the Trump administration's Government Efficiency Agency (DOGE) work, which he has been focusing on recently.

In the first-quarter earnings conference call held on the 22nd (local time), Musk said, “Most of the main tasks undertaken in DOGE have been completed,” and added, “From May, I plan to significantly reduce the time spent on that work.” However, he also noted that if requested by President Trump, he could devote one or two days a week to government work.

This statement came right after Tesla announced its poor first-quarter performance. Tesla's first-quarter sales this year were 19.34 billion dollars, a 9% decrease compared to the same period last year, and net profit plummeted by 71% to 490 million dollars. Especially, sales in the automobile sector fell by more than 20%. Immediately after the earnings announcement, when Musk announced he would focus on his main business, Tesla's stock price rebounded more than 4% after-hours.

Musk stated he is "still extremely optimistic about Tesla's future," and expressed expectations for demand recovery through the fully autonomous electric taxi 'Cyber Cab' project and low-cost model launch plans. He reiterated, “We will start autonomous taxi service in Texas, USA from June this year.”

However, skepticism remains in the market about how much Musk can actually devote to Tesla. He is currently leading multiple companies including Social Media X, AI startup xAI, and aerospace company SpaceX at the same time.

The background for the decline in first-quarter performance is analyzed as a complex interplay of intense competition with Chinese electric vehicle companies, aging lineup, and brand image damage due to Musk's political endeavors. In the US and Europe, a boycott against Tesla has occurred due to backlash against Musk, and actual sales are down 13% compared to last year.

Meanwhile, during the conference call that day, Musk claimed that the anti-Tesla protests are "organized and political in nature," adding that “some might be those enjoying government wasteful benefits or those receiving dishonest funds.” Regarding the Trump administration's tariff policy, he said, “I prefer lower tariffs rather than higher ones, but the decision is up to the president,” adding that he can only advise.

Tesla is currently seeking a rebound through the expansion of low-cost model production and US autonomous driving service expansion, but attention is focused on whether it can succeed in normalizing management amid complex variables such as global demand slowdown, supply chain issues, and US-China trade conflicts.