After three months of plunging profits, Tesla CEO Elon Musk says he will step back from his role in United States President Donald Trump's administration to focus on trying to stem his company's losses.
Musk, who is the world's richest man, has been an almost permanent fixture in the White House since Trump took office, leading the Department of Government Efficiency (DOGE) as it embarks on a controversial cost-cutting project that has gutted numerous government agencies.
"Starting probably next month, in May, my time allocation to DOGE will drop significantly," Musk told investors during a Tesla earnings call on Tuesday, shortly after the firm reported a 20 per cent drop in automotive revenue in the first quarter of this year, as well as a 70 per cent decline in overall profits.
Tesla has warned investors that "changing political sentiment" could lead to those losses continuing, as the company faces what some are describing as a consumer backlash to Musk's close association with Trump.
DOGE's work 'mostly done'
Musk has continued to defend DOGE's cost-cutting efforts as "critical" despite questions over the agency's tactics and overall savings.
In his announcement about scaling back, he said his work "getting the government house in order is mostly done" and that he would continue to work with the administration on a part-time basis for one or two days per week "as long as the president would like me to do so and as long as it's useful".
What's going on at Tesla?
In its quarterly update, Tesla signalled that it wasn't just Musk's alignment with Trump that could have "a meaningful impact on demand for our products", pointing to the US's "rapidly evolving trade policy" as another potential pain point for supply chain-related costs.
Although Tesla assembles the cars it sells in the US domestically, it relies on numerous parts that are made and exported from China.
Since the start of this year, the company's shares have been volatile, shedding 37 per cent of their value when markets closed on Tuesday.
Signals of a Musk-Trump clash?
Musk contributed hundreds of millions of dollars to Trump's re-election campaign in 2024, but in recent weeks, he has been critical of Trump's decision to impose tariffs on US' trading partners.
"I'll continue to advocate for lower tariffs rather than higher tariffs, but that's all I can do," he said during the investor call on Tuesday.
Earlier this month, Musk publicly sparred with Peter Navarro, Trump's trade adviser and one of the main architects of Trump's tariff policies, calling him "dumber than a sack of bricks" in response to comments Navarro made saying Musk was "not a car manufacturer".
"He's a car assembler in many cases," Navarro said during an interview with CNBC.
Trump has previously noted that Musk's time in government was coming to an end, recently telling reporters on Air Force One he would be gone "in a few months" because "he has a number of companies to run".
