ISLAMABAD (PEN) : Elon Musk announced he will be stepping back from his government-focused role to dedicate more time to Tesla, following the company’s steep drop in quarterly profits and growing investor concerns.
Musk Prioritizes Tesla Amid Earnings Disappointment
In a conference call with analysts, Musk stated that with the initial setup of the Department of Government Efficiency largely complete, he will now “allocate far more of [his] time to Tesla,” beginning in May. He added that he expects to spend only “a day or two per week on government matters” moving forward.
Tesla reported a 71% decline in net income for the first quarter, with profits falling to $409 million, or $0.12 per share — significantly below analyst projections. Revenue also dipped 9%, from $21.3 billion to $19.3 billion. Despite the dismal earnings report, Tesla shares gained more than 5% in after-hours trading, as investors welcomed Musk’s renewed focus on the automaker.
Dan Ives of Wedbush Securities called the move “a big step in the right direction,” reflecting investor sentiment that Tesla’s top executive needs to be more involved amid rising competition and internal challenges.
Autonomy Ambitions and Market Skepticism
Tesla reaffirmed its plans to release a lower-cost version of the Model Y in the coming months and maintained its timeline for launching a paid autonomous robotaxi service in Austin by June. Musk also reiterated bold expectations for self-driving capabilities.
“There will be millions of Teslas operating autonomously in the second half of the year,” Musk said. “Can you go to sleep in our cars and wake up at your destination? I’m confident that will be available in many cities in the U.S. by the end of this year.”
However, industry experts remain doubtful. “The system is not robust enough to operate unsupervised. It still makes far too many errors,” said Sam Abuelsamid, an auto analyst at Telemetry Insight. “It will suddenly make mistakes that will lead to a crash.”
Federal investigations into Tesla’s Autopilot and Full Self-Driving systems remain open, with concerns over inadequate driver alert systems and accident risks in poor visibility.
Profit Pressure from Global Forces and New Rivals
Tesla’s gross margins declined to 16.3% from 17.4%, while its energy storage and international operations are bracing for the impact of new trade tariffs imposed by the Trump administration. The company warned that both its vehicle and energy storage businesses could be affected by import taxes and retaliatory measures from China.
Tesla also paused orders in mainland China for its Model S and Model X earlier this month due to rising tensions. Meanwhile, competitors such as China’s BYD and several European automakers are advancing in EV technology, eroding Tesla’s market dominance.
Despite these setbacks, Tesla benefited from a $595 million boost in regulatory credit sales, up from $442 million a year earlier. The company also reported $2.2 billion in cash flow, a sharp increase from $242 million in the previous year.
Seth Goldstein, an analyst at Morningstar, noted that the results aligned with earlier delivery reports. “They’re not particularly surprising given that deliveries were down,” he said. “It was good to see positive cash flow.”
