• Demonstrators protest against Elon Musk and Department of Government Efficiency cuts outside a Tesla dealership, Saturday, April 12, 2025, in Kansas City, Mo (AP)

Elon Musk’s deep involvement in Trump’s Department of Government Efficiency (DOGE) has turned Tesla into a lightning rod for political controversy. While investors once hoped Musk’s proximity to power would ease regulations for Tesla’s autonomous vehicle ambitions, the opposite has occurred. DOGE’s aggressive government cuts and Musk’s polarizing image have alienated consumers and shareholders alike. His planned retreat from DOGE signals recognition of the damage his political ties have done.

Tesla reported a 71% plunge in profits and a 13% drop in sales, driven by intensified competition from Chinese EV makers, rising tariffs, and plummeting consumer trust. Tesla’s stock is down 37% since the start of 2025, and the brand faces mounting economic uncertainty. Musk’s distraction with DOGE and political battles have left Tesla vulnerable, prompting calls from shareholders for a refocus on core business.

Global protests, organized by movements like Tesla Takedown, have targeted Musk for his role in slashing public services via DOGE. Vandalism, boycotts, and a collapse in second-hand Tesla prices reflect widespread anger. Protest leaders say the financial hit is a direct result of public pressure. “The Tesla Takedown grassroots pressure is beginning to hit Tesla where it hurts — the company’s bottom line,” said activist Patty Hoyt.

Tesla’s tumultuous quarter

Tesla Inc. reported a staggering 71% plunge in net income for the first quarter of 2025, highlighting the deepening crisis facing the electric vehicle giant as it grapples with intense market competition, consumer backlash, and CEO Elon Musk’s political entanglements with the Trump administration.

Musk announced on Tuesday that he will significantly reduce his involvement with the controversial Department of Government Efficiency (DOGE), where he has served as a federal cost-cutting czar, and refocus on Tesla. Yet, during the company’s earnings call, he remained defiant. “I believe the right thing to do is to fight the waste and fraud and try to get the country back on the right track,” Musk told analysts.

Despite his efforts to reassure investors, the company’s financials painted a grim picture. Tesla’s adjusted earnings per share fell to 27 cents, missing analyst expectations of 41 cents. Revenue dropped 9% year-over-year to $19.3 billion, while automotive revenue declined by 20%. Vehicle deliveries were down 13%, with double-digit sales drops in major markets like the US, China, and Germany.

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Political fallout hits Tesla

Tesla’s troubles have been compounded by Musk’s polarizing role in the Trump administration. His leadership of DOGE, which has enforced widespread cuts across federal agencies, has provoked global protests, vandalism of Tesla properties, and declining consumer trust.

Tesla cited Trump’s steep tariffs and “changing political sentiment” as major challenges, adding strain to its supply chains and pushing production costs higher. Musk, who has advocated for lower tariffs, conceded that trade decisions ultimately rest with the president. “Whether he will listen to my advice is up to him,” he said.

Consumer backlash and market declines

Public sentiment has turned sharply against Tesla. The Tesla Takedown movement, responsible for hundreds of protests worldwide, celebrated the earnings report as proof of growing pressure. “The grassroots pressure is beginning to hit Tesla where it hurts — the company’s bottom line,” said activist Patty Hoyt.

Tesla’s market share in key regions has shrunk. In California, the largest EV market in the US, Tesla’s share of zero-emission vehicle registrations dropped from 56% to 44%. In China, shipments fell 22%, while deliveries in Germany plummeted 62%.

To counteract declining sales, Tesla launched a cheaper version of the Cybertruck, priced at $69,990, and plans to release a more affordable Model Y variant. Yet, analysts warn that pricing cuts alone may not reverse the trend.

Musk is doubling down on Tesla’s autonomous vehicle ambitions, including the long-promised Cybercab, a driverless taxi. Testing is set to begin in Austin, Texas, in June, but skepticism remains high after years of missed targets.

Tesla also pointed to growth in its energy-storage and software-subscription businesses as bright spots, with energy revenue climbing 67%. However, these gains were overshadowed by broader losses, including a 2.1% operating margin, down from 5.5% last year.

Investors remain wary

Though Tesla shares rose 4.6% ahead of the earnings report and an additional 3% in after-hours trading, the company’s stock remains down 37% year-to-date. Investors remain cautious, with many blaming Musk’s political distractions for Tesla’s turmoil.

Gene Munster, managing partner at Deepwater Asset Management, called the earnings a “train wreck,” but expressed hope that Musk’s reduced role in DOGE could allow Tesla to recover. “That’s the bet we’re making,” Munster said.

As Tesla faces mounting pressure from all sides — market competitors, political fallout, and global protest movements — questions remain about whether Musk’s promised refocus will be enough to stabilize the once-dominant EV maker.