Novinite.com
23 Apr 2025, 13:38 GMT+10
Tesla CEO Elon Musk announced plans to reduce his involvement in the Trump administration following a significant dip in the company's profits and revenues. Tesla's performance in the first quarter of 2025 revealed a 20% drop in automotive revenue compared to the same period last year, while profits plummeted by over 70%. The company also faced challenges with declining sales and backlash against Musk's political activities.
Musk attributed part of the decline in Tesla's fortunes to his political role within Trump's administration, acknowledging that his involvement in political matters had distracted him from focusing fully on Tesla. Specifically, Musk leads the Department of Government Efficiency (DOGE), a government initiative aiming to reduce federal spending and cut the government workforce. Due to the increasing pressure on Tesla, Musk stated that his time commitment to DOGE would be significantly reduced starting next month, allocating just one to two days per week to government affairs.
While Musk's involvement in politics has attracted protests and boycotts, he defended his role, claiming that the work of streamlining government operations was largely complete. Tesla's first-quarter revenue for 2025 was .3 billion, a 9% year-on-year decline, falling short of analysts? expectations. Additionally, Tesla cited factors like price cuts, trade tariffs, and the broader geopolitical climate as contributing to its challenges.
Tesla's Financial Challenges Amid Tariffs and Political Backlash
Tesla's disappointing earnings report for the first quarter was partly attributed to reduced vehicle deliveries, which had dropped 13% year-on-year, marking the company's weakest quarter since 2022. Alongside reduced vehicle sales, Tesla also faced factory retooling and currency fluctuations. Despite these setbacks, revenue from energy generation and storage grew by 67%, providing some relief. Tesla delivered 336,681 vehicles, but macroeconomic factors like the US-China trade war and rising tariffs posed additional risks to the company's global supply chain.
On the political front, Musk's controversial political activity has caused unrest. Protests outside Tesla showrooms in the US, Europe, and Australia have drawn attention to his political affiliations, including his support for Germany's far-right AfD party and his role in advising Trump on reducing the federal workforce. Tesla's CFO acknowledged that political backlash, including acts of vandalism and hostility, had negatively impacted brand perception and deliveries. Musk claimed that some of the protestors were allegedly paid, although there was no evidence to support this.
Tesla's Future Outlook Amid Disruptions
Despite the financial challenges, Tesla remains focused on long-term growth, particularly through AI-powered projects like Robotaxi and the humanoid robot, Optimus. Musk revealed that production delays for Optimus were due to supply chain disruptions, particularly in obtaining magnets, a vital component affected by restrictions on rare earth exports from China. Musk's ambitions for the company include launching Robotaxi services later this year, though concerns over the supply chain remain.
Tesla's stock value took a hit, shedding around 37% of its value in 2025, but after-hours trading saw a brief recovery, rising more than 5%. However, analysts have expressed concerns that Tesla's problems, including competition in the electric vehicle market and ongoing supply chain disruptions, could mount in the near term.
Get a daily dose of Australian Herald news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Australian Herald.
More InformationWASHINGTON, D.C.: The United States will limit visas for more than 250 officials from Nicaragua, U.S. Secretary of State Marco Rubio...
LANSING, Michigan: The Health Department in Michigan confirmed a measles outbreak in Montcalm County this week, marking the first such...
WASHINGTON, D.C. The U.S. Supreme Court will hear arguments on May 15 about President Donald Trump's attempt to restrict automatic...
WASHINGTON, D.C.: President Donald Trump has signed an executive order directing the U.S. Commerce Department to ease regulations on...
THE VATICAN - The world is in shock and mourning on Easter Monday as it woke to the news that Pope Francis had died. Having recently...
NEW YORK CITY, New York: A former New York City police sergeant, Michael McMahon, was sentenced this week to 1.5 years in prison. He...
New Delhi [India], April 23 (ANI): Australia stands with India at this 'difficult time,' Prime Minister Anthony Albanese said on Wednesday,...
New Delhi [India], April 23 (ANI): Former Australia opener Keith Stackpole, who played in 43 Tests and scored seven centuries, has...
New Delhi [India], April 23 (ANI): Former Australia cricketer Shane Watson praised Delhi Capitals batter KL Rahul's controlled and...
Tesla CEO Elon Musk announced plans to reduce his involvement in the Trump administration following a significant dip in the company's...
London [UK], April 23 (ANI): Leaders from around the world offered condolences to India following a terrorist attack in Jammu and Kashmir's...
Just as voting has begun in this year's federal election, the Coalition has released its long-awaited defence policy platform. The...