Musk to scale back government duties, aims to restore Tesla’s brand image

WASHINGTON, UNITED STATES: Elon Musk vowed to pull back ‘significantly’ from his work with the US government to concentrate on Tesla Inc. easing concerns of investors who lamented his time in Washington as a distraction.

The chief executive officer will devote ‘far more of my time to Tesla’ beginning next month, saying Tuesday that his stint leading the Department of Government Efficiency will be largely complete.

Investors and analysts have increasingly called for Musk to refocus on the electric-car company, which is struggling under the weight of slumping sales and rising costs from President Donald Trump’s trade war. Protests have sprung up in recent months in a consumer backlash over Musk’s government work.

The stock rose 5.1 percent in extended New York trading, rallying from an initial lukewarm reaction to Tesla’s first quarter results that underscored the deep challenges facing Tesla’s automotive and energy business lines. The company reported adjusted earnings of 27 cents per share for the first quarter, below the average analyst estimate, while backing off its earlier prediction that sales would return to growth this year.

Wall Street has soured on Musk’s political activities which have alienated core customers and caused serious damage to perceptions of his brand. Musk’s personal wealth has declined by more than $130 billion this year due to a selloff in Tesla shares.

Gene Munster, managing partner at Deepwater Asset Management, said that Musk wrapping up his DOGE work is ‘pretty simple math’ as vehicle demand declines.

“The central piece needed to heal the brand is for his to step back from DOGE, that was the minimum dosage needed,” Munster said.

Elon Musk’s wealth dips below $300 billion amid ongoing tariff fallout

Brian Mulberry, a client portfolio manager at Zacks, said its “certainly welcome news to hear that Elon will be back in his normal role as CEO of his companies soon.”

The company said that it’s “making prudent investments that will set up” the vehicle business for growth. That will depend on factors including production increases and the “broader macroeconomic environment.”

Musk added on the call that he had pushed for lower tariffs – underscoring his divergence with Trump on the issue. Trump’s moves to hike US duties on foreign goods have spooked investors and raised concerns of higher prices for US consumers. Musk said the tariff decisions are “entirely up to the president.”

Musk said he’ll continue to work with Trump administration for “the remainder of the president’s term,” but on a more limited basis. Heh is already poised to hit the 130-day limit that was designated for his role as a special government employee.

Trump’s tariffs have compounded Testla’s challenges, and threaten to upend automotive supply chains globally and drive up costs across the industry. While Tesla is expected to be relatively less affected than many carmakers due to its large plants in California and Texas, its vehicle nevertheless contain some non-US components, and they company has warned of a potential impact.

Musk told analysts that Tesla has been working on localised supply chains to help ease logistics and minimise risks of higher costs.

“We are the least affected car company with respect to tariffs, he said, but emphasised they are still difficult to navigate. “That puts us in a stronger position than any of our competitors.”