Elon Musk announced he’ll scale back his role in Washington next month, sparking a nearly 5% jump in Tesla stock despite the company’s poor quarterly performance.
Speaking on Tesla’s earnings call, Musk said his involvement with Trump’s Department of Government Efficiency (DOGE) will drop “significantly” by May. He’ll still contribute a day or two per week to ensure past reforms aren’t reversed.
This comes as Tesla reported a 20% drop in automotive revenue and a 71% plunge in net income for Q1. Investors are hopeful Musk’s return to focus on Tesla will help stabilize the company, which has lost $600 billion in market value this year.
Musk created DOGE after spending $300 million to support Trump’s 2024 campaign. Since then, DOGE has slashed budgets and staff across numerous federal agencies, including those regulating Musk’s businesses. Critics say it’s gone too far, with allegations of physical disruptions in government offices and questions around inflated cost-saving claims.
Musk has also faced backlash for political ties, especially in Europe, where protests have hurt Tesla’s brand. Despite increasing EV competition and an outdated product lineup, the stock saw a brief recovery after Trump reaffirmed support for Federal Reserve Chair Jerome Powell.
With Musk stepping back from government and returning focus to Tesla, Wall Street is cautiously optimistic.