He CEO of Tesla (Tsla.O), Elon Muskannounced in the last hours that it will significantly reduce the time dedicated to collaborating with the government of Donald Trump From next month, and will focus more on the management of its multiple companies.
The decision comes in a context of growing criticism for your participation in the so -called Government Efficiency Department (Doge, in English) —Due has led initiatives to cut federal jobs -, which has unleashed constant protests and acts of vandalism in Tesla dealers. Investors have expressed concern about the scarce time that Musk dedicates to Tesla, whose sales have collapsed.
“The hard work necessary to launch the Doge team and collaborate with the Government in financial reorganization is practically finished,” Musk said in a call with analysts. However, he clarified that he still plans to dedicate about 40% of his time to the Doge project.
The shares of Tesla, which had already risen 4% after the market closure just before the results call, fired up to 5.5% after their statements. However, the action has lost almost half of its value since its peak in December.
How to Tesla in his appointment with the market
At the end of Tuesday, Tesla reported profits in her main car business above the minimum expectations, and said she maintains her plan to launch an affordable vehicle.
However, the company warned that it will have to reevaluate its growth projection in three months due to the difficulty of measuring the impact of changes in global commercial policies on automotive and energy supply chains. Tesla said that “change in political feeling” could significantly affect demand in the short term.
Tariff tensions add more uncertainty. Tesla suspended some imports of components from China after the increase in US tariffs to 145%, Reuters reported. In response, China imposed its own tariffs, and Tesla stopped the orders of its S and X models in that country.
Musk, who was in favor of lower tariffs, acknowledged that Tesla is not immune to the “macro car demand”, and pointed out that economic uncertainty makes people doubt before making important purchases. “Without macroeconomic problems, we don’t see a reduction in demand,” he said. But he warned that tariffs could have a disproportionate impact on Tesla’s energy business.
Although the margin of the first quarter exceeded expectations thanks to a cost reduction, automotive revenues fell 20% and net gains collapsed 71%, both below the estimated by Wall Street. Musk recognized the criticisms of the company, but fell importance to the possible damage to the brand due to the sales fall of the first quarter.
His recent publications in the social network X suggest that he is taking up the control of his companies, after months concentrating on his efforts to reduce government spending. Now, his time outside Doge will be divided between Tesla and his other companies: Spacex, XAI and Neuralink.
What the market analyzes
“I think that more Musk’s attention in Tesla is positive for action, but to see a real movement we would need a headline like ‘Musk will leave Doge to focus on Tesla,” said Shawn Campbell, Camelthorn Investments advisor and investor.
Tesla reiterated his plan to launch an economic car – considerate key for future growth – in the first half of 2025, using existing platforms and assembly lines, after abandoning the development of a completely new model.
“The launch is still standing for the first half of the year,” said Lars Moravy, vice president of Engineering. “Production can start slower than expected, but there is no obstacle to start within the announced period.”
Reuters reported last week that Tesla’s plans for an affordable car would include a simplified version of the electric Model SUV and made in the US, although its launch would be delayed a few months.
Tesla also said that the launch of its robotaxis fleet in Austin, Texas, is still scheduled for June. The company seeks regulatory approval, but concerns about the security and legal risks of deploying autonomous technology not tested on public roads persist.
Consulted when the production of RobotaxisMusk replied that he hopes to see millions of teslas operating totally autonomously for the second half of 2026.
The automotive gross margin of the first quarter, excluding regulatory credits, fell to 12.5% from 13.6% of the fourth quarter, according to reuters calculations, although it exceeded the expectations of 11.8% collected by 21 Alpha visible analysts.
Tesla reported revenues of 19,340 million dollars in the first quarter, below the 21,110 million estimated by LSE.
The company had already reported this month that its vehicle deliveries fell 13% in the first quarter. Analysts anticipate a second consecutive annual fall in Tesla deliveries by 2025, despite incentives such as free load and total autonomous driving functions to boost sales.
Source: Ambito
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