Elon Musk said he would be spending less time in Washington slashing government costs and more time running Tesla Inc after his electric vehicle (EV) company reported a big drop in profits.
Musk said on a conference call with analysts on Tuesday that “now that the major work of establishing Department of Government Efficiency [DOGE] is done,” that he would be “allocating far more of my time to Tesla” starting next month. Musk said he now expects to spend just “a day or two per week on government matters.”
Tesla struggled to sell vehicles as it faced angry protests over Musk’s leadership of DOGE, a jobs-cutting group that has divided the country. The Austin, Texas-based company reported a 71 percent drop in profits and a 9 percent decline in revenue for the first quarter.
Photo: Reuters
“Investors wanted to see him recommit to Tesla,” Wedbush Securities Inc analyst Dan Ives said. “This is a big step in the right direction.”
Investors sent Tesla shares up more than 5 percent in after-hours trading, although they are still down more than 40 percent for the year.
The company reconfirmed that it expects to roll out a cheaper version of its best-selling vehicle, the Model Y sport utility vehicle, in the first half of this year. It also stuck with its predictions that it would be able to launch a paid driverless robotaxi service in Austin in June and have much of its fleet operating autonomously next year.
“There will be millions of Teslas operating autonomously in the second half of the year,” Musk said in a conference call after the results were announced.
The planned rollout of the robotaxi without a steering wheel or pedals comes as US federal regulators still have open investigations into whether the technology that Tesla hopes would allow cars to drive themselves is completely safe.
Tesla’s driver-assistance technology that could steer or stop a car, but still requires humans to take over at any time — its so-called Autopilot — is being probed by the US National Highway Traffic Safety Administration for whether it alerts drivers sufficiently when their attention wanders. The company’s Full Self-Driving, which is only partial self-driving and has drawn criticism for misleading drivers with the name, has also come under scrutiny for its connection to accidents in low-visibility conditions such as when there is sun glare.
Another challenge to Tesla, which once dominated the EV business: It is facing fierce competition for the first time.
Earlier this year, Chinese EV maker BYD Co (比亞迪) announced it had developed an electric battery that could be charged within minutes. Meanwhile, Tesla’s European rivals have begun offering new models with advanced technology that is making them real Tesla alternatives just as popular opinion has turned against Musk. The Tesla CEO has alienated potential buyers in Europe by publicly supporting far-right politicians there.
Tesla reported quarterly profits fell from US$1.39 billion to US$409 million, or US$0.12 a share. That is far below analyst estimates. Tesla’s revenue fell from US$21.3 billion to US$19.3 billion in the January-through-March period, also below Wall Street’s forecast. Tesla’s gross margin fell from 17.4 percent to 16.3 percent.
Tesla has said it would be hurt less by the US President Donald Trump administration’s tariffs than most US car companies because it makes most of its US cars domestically. However, it would not be completely unscathed. It sources some materials for its vehicles from abroad that would now face import taxes.
Tesla warned in announcing its results that tariffs would hit its energy storage business, too.
Retaliation from China would also hurt Tesla. The company was forced earlier this month to stop taking orders from Chinese customers for two models, its Model S and Model X. It makes the Model Y and Model 3 for the Chinese market at its factory in Shanghai.
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