Elon Musk will be stepping back from his role at the White House DOGE office.Carlos Barria/REUTERS
Tesla reported a weaker-than-expected first quarter, missing its revenue target by nearly $2 billion.
Elon Musk said he will step back from his role with DOGE, staying involved part time.
The company also unveiled a new timeline for robotaxis and details on its more affordable model.
Tesla came up short in its first-quarter earnings on Tuesday, missing Wall Street’s estimates amid a slump in sales and looming uncertainty in the auto industry.
The EV giant used its Tuesday call to share key updates that address some of investors’ concerns hanging over a particularly weak quarter.
For instance, Tesla CEO Elon Musk said that he would be stepping back from his role with the White House DOGE office and answered questions about how tariffs would impact Tesla.
Musk also unveiled new details on the much-anticipated “more affordable” Tesla model, as well as new timelines on the company’s robotaxi rollout.
Here are the five biggest takeaways from Tesla’s call and how analysts are taking it:
“Starting next month, I will be allocating far more of my time to Tesla,” he said, adding that “the major work of establishing the Department of Government Efficiency is done.”
He said he’ll continue to spend a day or two a week on government matters, for as long as President Donald Trump wants him to.
Musk did not directly address how his involvement with DOGE may have damaged Tesla’s brand. The company’s chief financial officer, Vaibhav Taneja, said that vandalism and anti-Tesla hostility “had an impact in certain markets.”
Tesla is set to debut its long-anticipated robotaxi service in Austin this June, starting with “maybe 10 to 20 vehicles,” Musk said.
“We want to make sure that we’re paying very close attention,” said Musk, adding that operations will “scale up rapidly after that.”
Tesla also confirmed on the call that the initial launch will include remote human operators who can intervene if a vehicle becomes stuck or encounters an issue.
Musk said the goal is to bring the service to “many other cities in the US by the end of this year,” predicting that “there will be millions of Teslas operating fully autonomously in the second half of next year.”
In a dig at Waymo, Musk said the autonomous driving competitor’s cars cost “‘way mo’ money,” adding that he doesn’t see competition for Tesla at present in this field.
Investors have long been pressing Tesla for an affordable model, which it has delayed. A more affordable car would mean a broader market of possible buyers.
“Plans for new vehicles, including more affordable models, remain on track for start of production in the first half of 2025,” the company said. “Given economic uncertainty resulting from changing trade policy, more affordable options are as critical as ever.”
Lars Moravy, the vice president of vehicle engineering, said during the call that it “doesn’t make bad cars,” and that the goal is to produce a vehicle that’s no worse than the cars it has previously released.
“The key is affordable,” said Moravy.
Musk said that Tesla would be “the least affected car company” when it comes to tariffs.
“With respect to supply chain risk, something that Tesla has been working on for several years, is to localize supply chains,” Musk said. “Tariffs are still tough on a company when margins are still low, but we do have localized supply chains in both America, Europe, and China, so that puts us in a stronger position than any of our competitors.”
Musk also said that he does not support high tariffs and has told Trump his take on tariffs.
“I’m an advocate of predictable tariff structures, and generally, I’m an advocate for, you know, pro-trade and lower tariffs,” said Musk.
Analysts are monitoring how tariffs affect automakers and their suppliers. Yun Mei, an EV analyst with wealth manager China Great Wall Securities, said on Bloomberg TV on Wednesday that suppliers have little room for price changes because the market is highly competitive.
If tariffs increase “too much, there is no room for Tesla or its suppliers to survive,” she said.
In after-hours trading, Tesla stock ticked up more than 5%.
Craig Irwin, a senior research analyst at Roth Capital Partners, told Business Insider before the earnings call that Tesla needs to emphasize its on-track production for the affordable model and its robotaxis.
“The conversation there is what’s going to drive the stock,” said Irwin.
Mei, the China Great Wall analyst, said the call gave her “strong faith” in Tesla’s sales recovery. But any further sales declines, coupled with tariffs, could make the company’s margin “very ugly,” she said on Bloomberg TV.
In a Tuesday night note, Cantor Fitzgerald analysts maintained their expectation that Tesla stock’s total return could exceed 15% over the next year.
The analysts also said that Tesla’s risks include regulatory approval for its robotaxi, a slowdown of EV demand, and the removal of the EV tax credit.
