Elon Musk to focus on Tesla after helping Donald Trump slash government costs

Billionaire Elon Musk says he’ll have more time for Tesla and pushing for lower tariffs as he scrambles to move from MAGA waste slasher, back to a visionary tech boss. But is it too late?

Elon Musk blamed a backlash and ‘organised protests’ aimed at him personally for falling Tesla sales.

Elon Musk is attempting to flip the switch from the chainsaw-wielding MAGA slasher, back to safer ground as visionary tech boss.

He is again talking up Tesla, and wants to change the world by turning his electric vehicle carmaker into the most valuable company on the planet, underpinned by autonomy and artificial intelligence.

But after months of chaos in Washington and untold brand damage to Tesla, does anyone believe him?

Musk led a 90-minute earnings call on Wednesday, after a horrible start to the new year for Tesla during which profits cratered almost 40 per cent and the carmaker dropped its forecast for a full-year rebound. Earnings of $US934m ($1.46bn) were the lowest since the end of 2020. Tesla’s shares have been hammered pressure for much of this year, falling almost 40 per cent.

The billionaire has blamed a backlash and “organised protests” aimed at him personally for falling sales, although he said the period was also marked by slowing production on a long awaited overhaul of the flagship Model Y.

Elon Musk has promised the long-awaited autonomous driving will be rolled out from June. Picture: AP Photo

While there was little by the way of short-term fixes, or efforts to combat the rise of China’s EV makers like BYD, the overarching message was, after months of being absent, the billionaire was back at Tesla.

These are the three big takeaways from Musk’s quarterly earnings call.

DOGE ending

Starting from May, Musk says time allocation to the controversial Department of Government Efficiency, or DOGE “will drop significantly”. He said the secondment that was aimed at addressing waste and fraud across government on behalf of Trump is largely done. While there was always an end point to this program, Musk’s mass firings of US government workers has become a political sore point for Trump and has generated pushback from the President’s own ranks. Many Republicans have quietly wanted to see the end of Musk.

As brand damage his risen with Musk’s time in the political area, Tesla’s investors have also called on the billionaire to focus on the car market to address the sales crunch.

Musk said he expects to continue to spend a day or two a week on government matters for as long as the President would like him to.

“Starting next month, I will be allocating far more of my time to Tesla, now that the major work of establishing the Department of Government Efficiency is done.”

Tariffs hurt

Even Tesla is exposed to Donald Trump’s tariffs, with a supply chain that relies on China, Europe, Canada and Mexico. Musk said he has pitched directly to the President for lower trade barriers, but the decision is ultimately Trump’s to make.

“I’ve been on the record many times saying that I believe lower tariffs are generally a good idea for prosperity, but this decision is fundamentally up to the elected representative of the people, being the President,” Musk said.

The comments from one of Trump’s closest allies are significant as they offer cover for other US bosses to start speaking out about tariffs.

Elon Musk and his son X with and Donald Trump look in the Oval Office. Picture: AFP

Tesla is among the least exposed because much of the supply chain is located on the continent where the car is built and sold, however Musk conceded tariffs are still tough on the company where profit margins are tight. About 85 per cent of Tesla’s US production is made locally. “We’re not immune,” he said.

One big vulnerability is Tesla’s energy business and battery cell production, which is based in China. This also underscores China’s global grip on processing the critical minerals for the production of EV batteries. “I’ll continue to advocate for lower tariffs rather than higher tariffs,” Musk said.

Autonomous driving?

Long promised by Musk, the billionaire said autonomous driving is about to become reality. This is where much of the blue sky has been baked into Tesla’s $US745bn market value. That is large-scale production of autonomous cars and large-scale vast production of autonomous humanoid robots.

Musk’s again talking up an autonomous rollout helped to push up Tesla shares more than 4 per cent in after hours trade.

The billionaire said the so-called RoboTaxis, or AI-powered driverless Model Y taxis, are “on track” to conduct paid rides across Tesla’s home town of Austin in Texas from June, then many other US cities from the end of the year.

However Tesla’s timeline may clash with regulators, which are still taking a cool view on full autonomous driving. The new rollout has raised the prospects of further conflicts for Musk around his government work.

Musk said autonomy will start to move the “financial needle” in a material way around the middle of next year, with Tesla dominating the field. He is confident that by the end of this year, in many US cities “you can go to sleep in your car and wake up at a destination”. This is not the first time Musk has promised big. But at least he’s talking Tesla again.

[e-mail]