Save Tesla? Musk: Expected to Return to Company from DOGE, Has Persuaded Trump to Lower Tariffs

After the U.S. market closed on Tuesday, Tesla released its Q1 earnings report. Despite the expected dismal data, the company still sent some optimistic signals to investors, such as its plan to launch a new car model in H1 2025.

During the earnings call, Tesla CEO Elon Musk stated that he would reduce his time at the Department of Government Efficiency (DOGE) and allocate more time and energy to Tesla's business. He also expressed optimism about Tesla's business prospects.

Following Musk's remarks, Tesla's stock price rose over 5% in after-hours trading.

Is Musk Returning to Tesla from DOGE?

Tesla's earnings report showed that its Q1 revenue was $19.34 billion, significantly lower than the $21.3 billion in the same period last year (Bloomberg estimated $24.3 billion). Tesla's adjusted earnings per share were $0.27, compared to the previous expectation of $0.44.

Although the earnings data was not impressive, Musk's remarks still boosted market confidence.

Musk stated during the earnings call:

"Starting early next month, in May, I will significantly reduce the time I allocate to the Department of Government Efficiency."

Musk mentioned that he would continue to spend one or two days a week at DOGE but would allocate "more time" to Tesla.

After Musk disclosed this news, Tesla's stock price rose 5% in after-hours trading.

Musk: "Lower Tariffs" Are Better for the Market

Tesla attributed its sales decline to trade uncertainties. The company stated that due to the uncertainty of Trump's tariffs, it would revisit its 2025 guidance in the Q2 financial update and canceled its long-term growth forecast.

The company stated in its announcement: "As rapidly evolving trade policies adversely affect Tesla and our peers' global supply chains and cost structures, uncertainties in the automotive and energy markets continue to increase... This trend, coupled with shifting political sentiment, could significantly impact demand for our products in the short term."

Musk stated during the earnings call, he had told Trump that "lower tariffs" would be better for the country, but the final decision on tariffs would still depend on Trump.

New Affordable EV to Begin Production in H1

Previously, Tesla had committed to launching an affordable EV in H1 2025. The company claimed that this car model would restore a 50% growth rate based on 2023 levels.

However, recent foreign media reports suggested that Tesla's plan to launch the affordable EV might have been delayed to later this year.

During the latest earnings call, Tesla stated that the affordable car is still planned to begin production in H1 2025, while the robotaxi Robotaxi is expected to start mass production in 2026—addressing two major investor concerns about Tesla's profitability.

Musk added during the call that the company is focused on deploying autonomous robotaxi tests in Austin in June, claiming that Tesla's cars are much cheaper than competitors like Waymo's EVs, as Waymo's EVs include expensive sensor suites.

Tesla's Tomorrow Will Be Better

For Tesla's main automotive business, the biggest concern is demand. In early April, Tesla reported Q1 deliveries of 336,600 units, far below the expected 390,300 units, marking the worst quarter since Q2 2022.

In stark contrast, Tesla's competitors saw significant sales growth as consumers purchased other EV brands in advance to avoid tariffs starting April 2.

In addition to declining sales and a 50% stock price drop, existing Tesla owners are seeking to sell their vehicles in large numbers, while Tesla cars are being vandalized across the U.S.

Musk acknowledged during the earnings call, that Tesla has indeed faced some "tough times" recently, but he remains optimistic about the company's future.

"Tesla's future is better than ever. The company's value lies in achieving sustainable abundance with our affordable AI robots. If you ask, what is the ideal future you can imagine? That's what you want. You want everyone to live in abundance in a sustainable way, in a way that benefits the environment. Essentially, it's a happy future, the happiest future you can imagine."