Tesla Net Profit Plunges 71%... Musk Begins 'Saving Tesla'

Net Profit Plunges 71%, Earnings Per Share Down 40%
WSJ: "Tesla's Reputation Damaged by Musk's Role in Government"

Elon Musk, CEO of Tesla, who has been leading federal agency spending cuts at the U.S. Department of Government Efficiency (DOGE), announced that he will reduce his government duties and focus on managing Tesla starting in May. This statement came shortly after Tesla reported first-quarter results that fell short of market expectations.

On April 22 (local time), during Tesla’s first-quarter earnings conference call, CEO Musk said, "Most of DOGE’s main tasks within the government are now complete," and added, "Starting next month, in May, the amount of time I spend on that work will be significantly reduced." While it is unclear exactly when Musk will leave the government, his status as a "special official" is set to expire at the end of May.

He stated, "During the remainder of the President’s term, we must ensure that the waste and fraud we have halted do not return, so as long as the President wants and finds it useful, I expect to spend one or two days a week on government work," and emphasized, "However, starting next month, I will devote much more time to Tesla."

Previously, Tesla announced in its earnings report released after the market closed that total revenue for January to March this year was $19.34 billion (approximately 27.6 trillion won), and net profit was $409 million (about 580 billion won). These figures represent decreases of 9% and 71%, respectively, compared to a year earlier. Adjusted earnings per share (EPS) fell 40% year-on-year to $0.27. Market research firm LSEG had previously projected Tesla’s revenue for the quarter at $21.11 billion and adjusted EPS at $0.39.

Foreign media pointed out that this disappointing performance is not unrelated to the prevailing "anti-Musk" sentiment. The Wall Street Journal (WSJ) analyzed that "Tesla’s reputation was damaged by Musk’s role within the government." CNBC reported that, according to a poll released that day, about half of Americans have a negative perception of both Tesla, the electric vehicle company, and CEO Musk.

The financial investment industry also viewed Musk’s focus on government duties, rather than his main role as a business leader, with skepticism. Dan Ives, an analyst at Wedbush Securities who is known as a prominent Tesla optimist, wrote in an investor note on April 20, "CEO Musk needs to step away from government work and fully refocus on his role as Tesla CEO."

Despite the poor results, Tesla’s stock price rose. On the New York Stock Exchange that day, Tesla shares closed at $237.97, up 4.6% from the previous trading day. The White House’s announcement of significant progress in U.S.-China trade negotiations lifted the entire New York market, and Musk’s statement about "focusing on his main job" also appears to have influenced the share price.