Tesla’s CEO, Elon Musk, has a lot on his plate. The mercurial leader runs Tesla, SpaceX, Starlink, and the social media website, X. He’s also been spending more than his share of time in Washington, D.C., where he heads the Department of Government Efficiency, or DOGE, an organization within President Trump’s administration focused on cost cuts.
Musk’s busy schedule has earned him equal praise and criticism from fans and foes.
His supporters applaud his seemingly golden touch in building companies, while detractors say his lack of focus has contributed to failed Tesla model launches, declining sales, and X service disruptions.
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The matter has come to a particular head this year as Musk’s political activism has accelerated. He spent hundreds of millions of dollars supporting President Trump’s election in 2024, and his role at DOGE has arguably turned off many once-loyal Tesla customers.
The impact has taken Tesla’s stock on a wild ride. Shares rallied after President Trump’s election on hopes that he would leverage his close relationship to benefit Tesla, only to fall sharply earlier this year when it became clear that Tesla wouldn’t sidestep Trump’s tariff policy, and sales had dropped because of DOGE.
Tesla’s stock price has performed much better since Musk said on Tesla’s earnings conference call that he would refocus energy on the company. His latest message to investors is similarly sending shares soaring today.
Elon Musk’s Tesla has seen its sales slide in key markets, including California.
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Tesla’s big advantage fades
Tesla’s (TSLA)  became a major success because Elon Musk decided early on to focus the car company on the performance of its electric vehicles rather than solely on their environmentally friendly nature.
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As a result, Tesla’s cars competed with and often outperformed luxury rivals like Mercedes-Benz, BMW, and Porsche. Celebrities and speed enthusiasts coveted Tesla’s aspirational vehicles, leaving competitors like Ford, General Motors, and others in the dust.
The high-performance moat, however, has largely disappeared.
Almost every car company, including Detroit’s Big Three, has spent heavily to build and market high-end EVs. These competing vehicles often deliver similar performance and possibly better fit-and-finish than Tesla.
As a result, Tesla’s electric vehicle market share has slipped, and this year, this problem worsened due to Musk’s often polarizing political positions, particularly in key markets like Europe and California.
Tesla’s sales in Europe dropped 49% year-over-year in April to 7,261 vehicles, according to the European Automobile Manufacturers’ Association. Meanwhile, total EV sales in the region rose 34%. So far, Tesla’s Europe unit volume is down nearly 40% through the first four months of this year.Â
The trends are similar in California, where Tesla registrations fell 21.5% year-over-year in the first quarter. Non-Tesla electric vehicle (EV) registrations were up 14%.Â
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Overall, Tesla sold 9% fewer EVs in the first quarter in the U.S. than last year/ Meanwhile, Ford and General Motors’ EV sales have surged. In Q1, Ford saw its EV sales climb 11.5%. GM’s Cadillac, GMC, and Chevrolet saw EV sales increase by 37%, 184%, and 114%.
Elon Musk promises more time at Tesla
Musk appears to have heard his shareholders’ complaints loud and clear.Â
“There’s been some blowback for the time that I’ve been spending in government with the Department of Government Efficiency or DOGE,” said Musk on Tesla’s Q1 conference call on April 22. “I think starting probably next month, May, my time allocation to DOGE will drop significantly… I’ll be allocating probably more of my time to Tesla and now that the major work of establishing the Department of Government Efficiency is done.”
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The assuring words have sent Tesla shares rocketing 38% since. Yet, worries that Musk is distracted have persisted, including in the wake of a recent increase in outages at X, amid renewed tariff debate last week following President Trump’s threat to place a 50% tariff on the EU.
Over the weekend, the concerns prompted Musk to reiterate his commitment to his businesses, including Tesla.
“Back to spending 24/7 at work and sleeping in conference/server/factory rooms,” wrote Musk in a post on X on May 24. “I must be super focused on X/Xai and Tesla (plus Starship launch next week), as we have critical technologies rolling out.”
The words emboldened investors yet again, given Tesla’s key programs underway, including its much-hyped autonomous driving robotaxi program. Musk has promised that full-self-driving vehicles will be on the road in Austin in June.
“Not only is FSD Supervised safer than a human driver, but it is also improving the lives of individuals who experience it,” said Musk in April.
Tesla’s stock skyrocketed on Musk’s message, jumping 7% on May 27.
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