Tesla (TSLA) has delivered something that many investors have been dreading for weeks: its growth prospects are even worse than most people feared.
As the electric vehicle (EV) producer prepared to report Q1 earnings, Wall Street analysts scaled back their expectations. Given how low the company’s deliveries for the quarter were, many experts worried that Tesla’s overall performance would be concerning.
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On April 22, after the close of markets, Tesla reported earnings, and Musk answered some of the questions investors had been seeking. The results were even worse than many had feared, with profits declining by an astounding 71%.
After missing on multiple key metrics, many investors are likely concerned about the company’s future. But even more concerning may be what Musk said on the call regarding his future plans, something many have been curious about.
Outrage against Elon Musk has sparked a global backlash from consumers against the Tesla brand.
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Musk reveals concerning plans for the near future
As Tesla stock has trended downward over the past quarter, experts have speculated that Musk’s political antics are part of the problem. Between the anti-Tesla sentiment sparked by his work with Trump and his focus on the so-called Department of Government Efficiency (DOGE) over his company, Tesla has been severely compromised.
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Even Wedbush Securities analyst Daniel Ives, a notorious TSLA stock bull, has called for Musk to walk away from DOGE and prioritize helping Tesla get back on the path to growth. Ives even went as far as slashing his TSLA stock price target, a move that shocked the financial world.
On the Q1 earnings call, Musk discussed his plans for balancing private- and public-sector responsibilities. While he noted that he’ll be spending more time at Tesla, he isn’t abandoning his responsibilities on Capitol Hill, despite what Trump has hinted.
“I think 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,” he stated. “But starting next month, I’ll be allocating probably more of my time to Tesla now that the major work of establishing the Department of Government Efficiency is done.”
Some Tesla investors cheered at the news that Musk would likely be shifting more of his focus to Tesla. But these celebrations may be premature. Musk’s choice of words, specifically the term ‘probably,’ implies that he isn’t committed to anything and that he wants to keep the option to continue his work with DOGE.
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Musk did speculate on the call that he thinks his time at DOGE will “drop significantly,” most likely in May. However, his vague language suggests that he isn’t certain of anything and doesn’t want to commit to any concrete changes.
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It is also important to note that Musk has a long history of missing deadlines and walking back promises.
For years, he teased the release of an electric pickup truck that ended up being pushed back several years, only to receive an underwhelming welcome from consumers. And despite his promises that Tesla would deliver an EV with a $25,000 price tag, the project ended up being scrapped in April 2024.
Tesla is still facing a rough road ahead, despite Musk’s promises
Despite Tesla’s dismal earnings report, shares are rising today, likely due to Musk’s vague promise to return to the company. However, unless he actually walks away from DOGE and returns to being CEO of Tesla full time, this growth isn’t likely to continue.
Experts such as Ives have sounded the alarm on Musk’s work with DOGE for weeks, using terms such as “code red moment” to describe it. But Musk seems focused on appeasing investors in the short term while still keeping up his Capitol Hill responsibilities, indicating that he isn’t paying attention to these warnings.
Related: Analyst issues scathing take on Elon Musk and Tesla stock
Ives published a new note today, raising his price target and claiming that Tesla had gotten Musk back. However, Musk could easily continue focusing more on DOGE than Tesla, further compromising TSLA stock and its growth prospects.
Tesla shareholder Ross Gerber has called for Musk to step down, arguing that the company can only move forward with different leadership, given the damage inflicted to the brand.
In a recent X post, he predicted that Musk would attempt to distract investors from the company’s dismal performance, stating, “This is the worst performance I’ve seen in Tesla’s history.” Given the focus on Musk’s vague DOGE plans and not on Tesla’s low profits and revenue drop, his argument may be correct.
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