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As Tesla’s sales and profits plunge, CEO Elon Musk says he’ll spend less time working for the federal government — but that he has no plans to stop his work with DOGE entirely.

“If the ship of America goes down, we all go down with it,” he said on a call with investors and analysts Tuesday night, defending the amount of time he has spent focusing on slashing the size of the federal government. He also dismissed protests against Tesla as being “paid for,” and said that demand for the company’s vehicles remains strong despite a sharp decline in sales.

Tesla’s quarterly earnings report, released about an hour before the call, showed that the company’s net income plunged by 71% year-over-year and that revenue from selling cars dropped by 20%.

Analysts had been expecting bad news: They already knew Tesla’s deliveries in the first quarter of 2025 were down 13% from a year ago. That was the company’s biggest-ever quarterly decline in sales. Meanwhile, electric vehicle sales in general rose 7% over the same timeframe.

Musk and other Tesla analysts emphasized that multiple factors affected those poor sales, including the fact that some customers may have been waiting to buy a Model Y as the popular vehicle went through a refresh. But there’s evidence that the destruction of Tesla’s brand among Democrats and liberals — who remain far more likely than Republicans and conservatives to be shopping for an EV — is also a major factor.

Musk’s controversial political work has significantly harmed Tesla’s brand reputation, according to multiple surveys. Tesla showrooms have been the sites of repeated protests over the last few months. In some cases, vandals have struck Tesla vehicles. And the sense that driving a Tesla now signals support for Musk and President Trump has haunted some current Tesla drivers and driven some EV shoppers away from the brand.

Musk dismissed that, saying that “absent macro issues, we don’t see any reduction in demand.”

He attributed blowback against his DOGE work to “those who were receiving the wasteful and fraudulent dollars,” saying without evidence that protests against Tesla are “paid for.”

Tesla Takedown, the group that is organizing the protests, wrote in an emailed statement that protesters are not paid. “Volunteer hosts and participants are stepping forward because they believe in democracy and the rule of law, not because a billionaire is paying them,” the group wrote in the statement sent after the call. “The irony is rich coming from a man who spent $277 million to get Donald Trump elected.”

A company facing other headwinds

Used Tesla prices have fallen by 10.1% in the last 12 months, according to data from iSeeCars.com, while the price of used cars, in general, rose by 1%.

That’s welcome news for anybody who wants to buy a used Tesla. But that falling value is a blow to current Tesla owners and a red flag for new car shoppers. And because Tesla, as a company, owns a large number of its own vehicles — any Tesla that is leased is technically owned by Tesla — it hurts the company directly, too.

On the earnings call, Tesla executives nodded to the falling value of used cars as contributing to reduced profits. There are other headwinds: While Tesla is less affected by tariffs than some rivals, executives said that they would hurt Tesla, too — and Musk said he has attempted, unsuccessfully, to persuade President Trump to support lower tariffs.

But overall, Musk said that Tesla is “not on the ragged edge of death,” and maintained that the company’s long-term profitability relies on robotaxis and autonomous robots — not the more conventional business of selling cars.

Investors want to see Musk focus on his businesses

Dan Ives, a stock analyst who has long been a vocal believer in Tesla and Elon Musk, said before this call that it would be a “code red situation” if Musk doesn’t signal an imminent departure from DOGE. Ives still believes Tesla could have a bright future – if Musk returns his attention to the company.

“We view this as a fork in the road time,” Ives wrote in a widely read note this week — echoing the infamous “fork in the road” emails that Musk’s employees received when he cut jobs at Twitter, and which federal employees received this spring.

On the earnings call Tuesday, Musk did say he would be cutting the time spent on DOGE work — because the bulk of the work was “mostly done,” he said, not because of pressure on Tesla. But he made it clear he wasn’t leaving DOGE entirely.

“I’ll have to continue doing it for, I think, for the remainder of the president’s term, just to make sure that the waste and fraud we stopped won’t come roaring back,” Musk said. (As ReadNOW and other outlets have reported, Musk’s claims of stopping massive amounts of waste and fraud have not been supported by the data DOGE has presented.)

“I’ll continue to spend a day or two per week on government matters for as long as the president would like me to do so and as long as it is useful,” Musk said. He did not comment on his status as a “special government employee” that is expected to expire around the end of May, given the 130-day cap per year on work people can do for the government under that job category.

It was enough for Ives, who told ReadNOW via email after the call that his team views this as “the beginning of the end of his time in the Trump White House,” like he had hoped to hear.

Other investors seem to feel similarly; Tesla share prices rose in after-hours trading.

Tesla’s continued EV dominance is not guaranteed 

Tesla has had an enormous influence on the growth of electric vehicles in the United States and around the globe. And it has undeniably dominated the EV market in the U.S.

But as EV sales surge in China, Chinese manufacturers are unveiling tech breakthroughs, product features and sales numbers that are the envy of other automakers. Chinese EV giant BYD is now neck-and-neck with Tesla for global leadership of EV sales.

In the U.S., even as Tesla sales decline, the company still sells far more EVs than any other carmaker. But Tesla’s share of the EV market has fallen below 50% and shows every sign of continuing to slide.

Overall, according to Cox Automotive, new EV sales grew by 7% last year, while Tesla’s sales shrank. That’s because companies like GM, Toyota and Honda sold a growing number of EVs, enough to make up for shrinking Tesla sales — and then some.

A more affordable EV or new models in the aging line-up might help Tesla win back market share, but the earnings call was scanty on details on those fronts.

Musk continues to be confident in Tesla’s ability to be the most valuable company in human history. He also dismissed the threat of being out-competed by Chinese companies on artificial intelligence, the technology he’s staked Tesla’s future on.

He said he was confident that Tesla would have the best AI tech in the world.

“I’m a little concerned that on the leaderboard, ranked two through 10 will be Chinese companies,” he said. “But I’m not worried that rank one will be Tesla.”