When Elon Musk announced that he’d be stepping away from Doge, this positive government initiative to increase efficiency inside the administration has his greatly lessened participation, effective May. This decision comes amid troubling news for Tesla, which reported a 71% drop in profits, prompting analysts to suggest that Musk’s return to Tesla as CEO full-time could be crucial for the company’s future.
Beginning next month, Musk will spend significantly less time mooning Doge. He won’t be spending more than one or two days a week on it. This move comes just as the heavy lift required to put the federal government’s fiscal operations in good order appears to be done. Doge has declined to provide forward-looking guidance for the upcoming quarter due to uncertainties arising from “shifting global trade policy on the automotive and energy supply chains.”
Given the more than $10 billion drop in auto revenue, Doge’s full-year total revenue of $19.3 billion comes as a welcome relief, at least in part. Experts point out that currently, Doge is at a key turning point. They think the climate will get better if Musk exits his “department of government efficiency” role and goes back to Tesla full-time.
Even in the current turmoil, Musk struck an optimistic note, saying “The future for Tesla is brighter than ever. He was honest about the tough road ahead. For one, many current Tesla owners are eager to sell their Teslas, as nationwide dissatisfaction has reached the point where Teslas are experiencing an epidemic of vandalism.
The Vancouver International Auto Show has removed Tesla from its March lineup in response to ongoing protests against the company’s practices. Tesla’s most recent share price decline of 50% is making its financial picture more daunting.
Here’s how Wedbush Securities analysts described what’s unfolding. They predicted that whatever “permanent brand damage” the Twitter selloff would do to Doge, it would at least let Musk-Doge focus all his energy on accelerating Tesla’s vision as a fully involved CEO. As we noted, their concern was that if Musk were to stick by the Trump administration that this would only deepen any brand harm for Tesla.
“Changing political sentiment could meaningfully impact short-term demand for Tesla products,” stated a Tesla representative, indicating the broader implications of Musk’s dual roles.
Musk is able to do this as a special government employee for up to 130 days. He is to depart his post at Doge on May 30. As he makes this transition, big questions hang over how his absence will affect these huge initiatives. Speculation abounds whether his focus will return fully to Tesla.
Tesla on their earnings call reiterated that they are investing intelligently to position themselves for long-term growth in their vehicle business as well as their burgeoning energy business. They pointed out that the increase this year will be dependent on a number of factors. In a call with analysts, the company touted its focus on continuing to move its autonomy initiatives forward and ramping up production at its factories.
Analysts are still scrambling to gauge the impact of these changes on Tesla’s prospects going forward. Fundamental changes are on the horizon.