Tesla Sales Plunge as Musk Plans to Step Down DOGE Role

Tesla’s once-undisputed reign over the electric vehicle (EV) market is facing its biggest test yet. The company’s Q1 2025 earnings report, released earlier this week, painted a troubling picture: net income fell by 71% year-over-year, while automotive revenue dropped 20%. All of this comes as CEO Elon Musk’s political affiliations and role in the federal government stir backlash from core Tesla customers.

And while Musk says he’s ready to spend less time on politics, he made it clear: he’s not stepping away entirely from his controversial DOGE (Department of Government Efficiency) role.

The Numbers Tell the Story

Tesla’s financials this quarter were hard to sugarcoat:

• Net income fell to $409 million — a 71% drop from Q1 2024.
• Revenue hit $19.3 billion, missing analyst expectations of $21.45 billion.
• Vehicle deliveries shrank 13% to 386,810 — the company’s worst quarter since 2022.

Analysts had braced for a tough report after Tesla’s Q1 delivery numbers showed a massive dip, particularly when global EV sales rose by 7% during the same period. While rivals like GM, Hyundai, and BYD picked up momentum, Tesla faltered — despite Musk’s repeated claims that demand remains strong.

Politics Hurting Tesla?

Musk, who has been a central figure in Donald Trump’s administration as the head of DOGE, has faced increasing criticism over his political work and online rhetoric. According to Axios, that political association may be alienating liberal consumers, who historically made up a significant portion of Tesla’s customer base.

Protesters, including the activist group Tesla Takedown, have been demonstrating outside Tesla showrooms and claiming Musk’s politics are undermining democracy. Musk dismissed the protests during the earnings call, calling them “paid for” and blaming them on people upset by the reforms DOGE has pushed through — without citing any evidence.

“The irony is rich coming from a man who spent $277 million to get Donald Trump elected,” Tesla Takedown replied in a statement, as quoted by NPR.

Another worrying sign for Tesla: the value of its used cars is tumbling.

According to iSeeCars, used Tesla prices dropped by 10.1% in the last 12 months, while the average price of used cars overall rose by 1%. That’s bad news not only for current Tesla owners but for the company itself — since Tesla retains ownership of many leased vehicles, a depreciation in value hits the company’s books directly.

Tesla executives acknowledged during the call that the slump in used car values contributed to the sharp drop in quarterly profits.

Despite the poor numbers, Musk remains bullish on Tesla’s long-term vision — but it’s not about selling more vehicles. Instead, he says, the company’s future lies in robotaxis, AI-powered autonomous vehicles, and humanoid robots.

“I’m not worried that rank one [in AI] will be anything other than Tesla,” Musk said during the call, though he admitted that “rank two through 10 might all be Chinese companies.” He reiterated confidence in Tesla becoming the most valuable company in history.

His focus on AI comes just as Tesla’s share of the U.S. EV market dropped below 50%, according to Cox Automotive, while overall EV sales continue to rise.

Will Musk Step Away From Government Work?

For now, Musk says he will cut back on the time he spends working for DOGE. He told investors he’d be reducing his political duties — not because of pressure, but because “the work is mostly done.” He added that he’ll still spend a day or two each week on government matters “as long as it’s useful.”

That was enough to satisfy some investors. Dan Ives, a Tesla bull at Wedbush Securities, called it “the beginning of the end of [Musk’s] time in the Trump White House” and said it was exactly what investors wanted to hear.

As noted by Politico, Tesla’s share price rose in after-hours trading after Musk signalled he would turn more attention back to the company.

Musk remains confident that Tesla will bounce back — particularly with new AI technology and an upcoming robotaxi reveal expected in June 2025.

But with fierce competition from Chinese EV makers like BYD, along with growing pressure in Europe and the U.S. from legacy automakers, Tesla’s dominance is no longer guaranteed. Its market share is slipping, and its brand loyalty is facing its biggest test in years.

For Tesla to reclaim its momentum, experts say the company may need to refresh its aging vehicle lineup, introduce a more affordable EV, and — perhaps most importantly — get back to basics.

Tesla has been a pioneer, a disruptor, and a cultural icon. But now, the EV giant is at a crossroads. Between political entanglements, slipping market share, and financial headwinds, Elon Musk has more to prove than ever.

The next few quarters may define not just the future of Tesla — but also Musk’s legacy as the tech world’s most polarizing visionary.