Tesla shares saw a significant rebound on Wednesday, April 2, 2025, following a report from Politico suggesting that CEO Elon Musk may soon leave his position at the Department of Government Efficiency (DOGE) to refocus on his electric vehicle company. The news sparked investor optimism, leading to a more than 5% increase in Tesla's stock, which had suffered earlier in the day due to disappointing vehicle delivery numbers.
Initially, Tesla's stock dropped as much as 6.4% after the company reported first-quarter delivery figures that fell short of expectations. The automaker delivered 336,681 vehicles, significantly below the estimated 390,343. Production figures were also disappointing, with Tesla producing 362,615 vehicles against an estimate of 412,148.
The recovery in Tesla's stock came as the broader market also showed gains, with the S&P 500 and Nasdaq Composite rising by 0.5% and 0.9%, respectively. However, despite Wednesday's gains, Tesla shares have dropped over 5% in the past month and have seen a staggering decline of more than 31% year-to-date. The first quarter alone saw a 36% drop, marking the largest quarterly decline for the company since 2022.
According to the Politico report, President Donald Trump expressed satisfaction with Musk and the spending cuts implemented under DOGE. However, it appears that both have agreed Musk should return his focus to his businesses. NBC News further reported that a senior government official indicated Musk would leave his government role at the end of a 130-day stint as a special government employee.
Musk's involvement with the Trump administration has made him a polarizing figure, frustrating many Tesla investors who believe his political duties have distracted him from managing the company effectively. This sentiment has been echoed by New York City Comptroller Brad Lander, who has urged the city to sue Tesla on behalf of NYC pension funds. Lander's office cited material misstatements from Tesla claiming that Musk "spends significant time on the company and is highly active in its management, despite his helming the Trump Administration's DOGE initiative."
At a rally in Green Bay, Wisconsin, on March 30, Musk commented on the impact of his government role on Tesla's stock, stating, "My Tesla stock and the stock of everyone who holds Tesla has gone, went roughly in half. This is a very expensive job is what I'm saying." Musk's political activities, particularly his support for a Republican judge in Wisconsin's state supreme court election, have drawn criticism from various quarters, including progressive groups who have labeled his influence as detrimental to the election process.
Despite the challenges, there is cautious optimism among investors regarding Musk's potential departure from DOGE. The idea that he may soon return to focusing on Tesla has alleviated some concerns, even as analysts warn that the stock remains overvalued. One analyst noted that even if Musk resumes his role at Tesla full-time, the company's stock is built on questionable claims about future revenue.
The backdrop to this situation includes ongoing protests and boycotts against Tesla, as well as violent attacks on its stores and vehicles around the globe. These incidents have been exacerbated by Trump's automotive tariffs, which pose challenges for Tesla's key suppliers in Mexico and China.
As of April 2, 2025, the future of Tesla remains uncertain. The company faces mounting pressure from both its financial performance and Musk's political entanglements. Investors are left watching closely for any developments regarding Musk's role in the government and his commitments to Tesla, as they weigh the potential for recovery against the backdrop of broader market trends and company performance.
