Tesla’s quarterly earnings dropped by 71 percent, the company announced Monday, marking the latest sign of bad news for Elon Musk’s electric vehicle manufacturer as scrutiny of the tech billionaire persists.
The electric vehicle company reported a 9 percent decline in revenue for the first three months of this year. Its earnings totaled $409 million, down from $1.4 billion in the first quarter of last year, the company said.
Tesla's stock closed Tuesday afternoon at $238 a share, a nearly 37 percent drop from the beginning of the year.
The numbers, which fall far below analysts' expectations, come amid mounting scrutiny of Musk over his leadership of President Trump's so-called Department of Government Efficiency" cost-cutting initiative.
Musk acknowledged the blowback on Tuesday evening's earnings call, but doubled down on the mission of DOGE.
"I believe the right thing here is to just fight the waste and fraud and get the country back on the right track and working together with President Trump and his administration, because if the ship of America goes down, we all go down with it, including Tesla and everyone else," Musk told investors.
Concerns were raised in recent weeks that Musk is spending too much time on DOGE and not enough on Tesla amid an unstable period for the company.
He tried to appease these concerns on Tuesday, telling investors that starting next month, he will be allocating "far more of my time to Tesla now that the major work of establishing" DOGE is "done."
"Starting probably next month, May, my time allocation to DOGE will drop significantly," Musk said. "I'll have to continue doing it for, I think, the remainder of the president's term just to make sure that the waste and fraud doesn't come roaring back, which we'll do, if it has the chance."
The tech billionaire said he will likely spend one to two days of the week on "government matters" for "as long as the president would like me to do so and as long as it is useful."
The company made clear on Tuesday it is dealing with the ripple effects of the U.S.'s ongoing tariff war with other countries, notably including China.
While it was speculated that Tesla might avoid the brunt of Trump’s tariffs due to its focus on domestic production, the company emphasized it is not immune to retaliatory tariffs from other nations.
"Uncertainty in the automotive and energy markets continues to increase as rapidly evolving trade policy adversely impacts the global supply chain and cost structure of Tesla and peers," the company wrote in the Q1 2025 report.
"This dynamic, along with changing political sentiment, could have a meaningful impact on demand for our products in the near-term," Tesla added.
Musk emphasized Trump's moves on tariffs are entirely up to the president, but that he will advocate for lower tariffs, calling it generally a "good idea for prosperity."
Tuesday's full financial report comes after Tesla revealed earlier this month its first-quarter sales dropped nearly 13 percent. The company reported 336,000 vehicle deliveries in the January to March quarter, a notable dip from the 387,000 vehicles in the same period a year ago.
Tesla's stock plummeted nearly 50 percent since late December as Musk helped carry out DOGE's efforts, which included mass layoffs at some federal agencies and the gutting of some funding programs.
Some took out their frustrations on Tesla and company showrooms across the country dealt with peaceful and some violent demonstrations, including arson attacks, vandalism and shootings.
Ahead of the earnings call, a group of eight state treasurers wrote to Tesla's board of directors, voicing concerns about Musk's leadership of the electric vehicle manufacturer.
"Musk continues to divide his attention across multiple companies and a high-profile advisory role within the federal government," the letter to Robyn Denholm, chair of Tesla's board, stated.
"These external commitments raise serious questions about whether Tesla’s leadership is fully engaged in addressing the company’s core challenges."
Amid the escalating trade war earlier this month, Tesla suspended new orders of two models on its Chinese website Beijing raised tariffs on American goods to 125 percent in the country’s ongoing trade fight with the U.S.
The company did not provide a reason for suspending the orders, though analysts suggested the move showed the tight spot Musk and Tesla are in amid the trade fight.
The company emphasized on Tuesday it is still expanding its business model to include autonomous robots and artificial intelligence (AI)-driven products amid the uncertain automotive market.
"AI is a major pillar of growth for Tesla and the broader economy and key to our pursuit of sustainable abundance," the company wrote.
Musk told investors he remains "extremely optimistic" about the future of the company, arguing it is not the first time Tesla has faced challenges.
"I continue to believe that Tesla, with excellent execution, will be the most valuable company in the world by far," he said.
Updated at 6:18 p.m. EDT