The 'Beginning of The End' For Musk in The White House: Dan Ives

Dan Ives Global Head of Technology Research, at Wedbush Securities joined Bloomberg Intelligence, breaking down the latest tech earnings this week from Alphabet, Tesla and Intel. He also stated that this Elon Musk's Tesla earnings call was "the most important" for Musk's career.

Elon Musk vowed to pull back “significantly” from his work with the US government and pay more mind to Tesla Inc., assuaging investors concerned about the carmaker’s worst quarter in years.

The chief executive officer will devote “far more” of his time to Tesla starting next month, saying during an earnings call Tuesday that his work establishing the so-called Department of Government Efficiency will be “mostly done.”

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 against Musk’s government work.

“At Tesla, we’ve gone through many a crisis over the years,” Musk said. “This is not one of those times. We’re not on the ragged edge of death, not even close.”

Tesla’s stock climbed 3.8% at 9:36 a.m. Wednesday, despite first-quarter results that underscored weakness in the company’s core automotive business and tariff headwinds for its expanding energy operations. The carmaker missed analysts’ estimates for both revenue and earnings, and management backed away from earlier predictions that vehicle sales will return to growth this year.

Wall Street has soured on Musk’s political activities, which have alienated core customers and done serious damage to Tesla’s brand. The CEO’s fortune shrunk by $116 billion in the first quarter, his biggest quarterly drop on record, according to the Bloomberg Billionaires Index.

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

Tesla cautioned that while it’s making investments to position its vehicle business for growth, its prospects depend on factors including the broader macroeconomic environment. The company will revisit its outlook for volume when reporting second-quarter results.

The plan for capital expenditures this year was also pared, with the automaker warning that changes in trade policies may set back its timelines for unspecified projects.

Trump’s tariffs have compounded Tesla’s challenges, even though all the vehicles it sells in the US are assembled domestically. Duties on auto parts shipped in from Canada and Mexico are slated to take effect next month and will hit the company’s profitability.

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

“We are, I think, the least affected car company with respect to tariffs,” he said. “That puts us in a stronger position than any of our competitors.”

‘Tight Rope’

Ben Kallo, a Baird analyst with the equivalent of a buy rating on Tesla’s stock, said the mentions of tariffs were a means to alerting policymakers of the pain the levies are causing.

“It’s a way to get the message across that tariffs are going to impact Elon without him saying that as part of the US government,” Kallo said. “He’s walking a tight rope there while part of the government with DOGE.”

Tariffs will have a bigger impact on Tesla’s energy business. The company’s Megapack energy-storage systems heavily rely on battery cells from China, which accounted for 84% of global lithium-ion battery production capacity in 2024, according to research firm Wood Mackenzie. By comparison, North America made up just 5%.

Consumer Backlash

Musk’s politicking in the US and across Europe have rendered Tesla showrooms and charging stations targets for demonstrations and vandalism. Tesla Takedown, a group formed to coordinate peaceful protests on a global basis, is urging owners of the company’s cars to sell their vehicles and its stock.

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