“There has been some blowback:” Unrepentant Musk admits Doge impact on Tesla

Tesla CEO Elon Musk has conceded for the first time that his electric vehicle and battery company Tesla has suffered  “blowback” from his work for Donald Trump as head of the controversial Department of Government Efficiency (Doge).

Musk’s comments after the company suffered a 71 per cent fall in first quarter net income – compared to the same quarter in the previous year – as intense competition and a big fall in vehicle sales took a toll of its earnings and its key results fell below even recently lowered analyst expectations.

Tesla boosters have insisted that the fall in sales – and the subsequent impact on profits – have been the result primarily of the retooling of factories for the renewed Model Y and the impact of increased competition.

But Tesla admitted in its quarterly statement that the retooling was only “in part” responsible for the fall in sales, and Musk later admitted that his prominent role with the Trump administration had had an impact.

“There has been some blowback,” Musk said at the start of the company’s earnings call to discuss the Q1 results, adding that there were “well organised” protestors and recipients of “fraudulent funds” who “will try to attack me and anything associated with me.”

There have been widespread reports of consumers deciding not to go ahead with Tesla purchases, or even selling their own EVs, because they were not happy with Musk’s work with Trump, and his promotion of far-right political causes and conspiracy theories.

It has causes some major corporates customers to look to other EV brands, and has led to Tesla being excluded from specific government rebate programs, particularly in the US.

Musk said his work with Doge, which has focused on “fraud and waste” but which has also been widely criticised for stripping funding from key government agencies, is essential. “If America goes down, we all go down with it,” Musk said. “It is critical work.”

Musk admitted that his focus on Doge was a concern to those investors who wanted him to spend more time with Tesla. He said, however, that from May – while his focus would return to the company – he would still spend a day or two a week working for Trump.

“My time allocation with Doge will reduce significantly – but it will continue,” Musk said. “I will continue to spend a day or two a week on government matters.”

It is not the only problem that Tesla is facing. Tariffs are having and will have an impact, largely because Tesla sources significant supplies from China, particularly in battery cells for its EVs and stationary storage. Musk says he has tried to convince Trump to change his decision, but that Tesla is better placed than any of its competitors.

“We have near term challenges because of tariffs,” Musk said. “I will continue to advocate for lower tariffs than higher tariffs. That is all i can do.”

Tesla’s net income in the March quarter slumped 71 per cent to $US409 million, and would have been in the red were it not for the sales of regulatory credits – something that Trump and other like minded governments would like to crush.

The earnings per share came in at just 27c, well below analyst revised estimates. Auto revenues were down 20 per cent to $US14 billion after its biggest fall in EV deliveries (down 13 per cent).

The energy division was one bright spot with revenues up 67 per cent to $US2.4 billion, a record sales of the Powerwall battery (1 GWh for the first time), and the first deliveries from the new Shanghai megafactory that is making Megapack grid batteries. The first batch of 100 is on its way to the Western Downs battery project in Queensland.

However, Tesla hailed the transition and retooling of its factories during the first quarter from the legacy Model Y to the refreshed Model Y as a remarkable achievement. It said the first day of sales of the new Model Y in China had been a record for the company, although it did not provide numbers.

Musk again insisted, however, that the future of Tesla, and its potential vast worth, will be in Ai – robots and autonomous vehicles. He suggested the company could be the most valuable in the world – more valuable even than its five closest peers.

He intends to roll out the first “fully autonomous” taxis in Austin in June, and insists that once they are operating reliability in a few cities, they will be able to be rolled out in multiple places across the US and other countries.

He did, however, concede that the Austin trial will commence with Model Y cars and not the much hyped “Robo-taxi” or “cyber-cab”. He insisted that “unsupervised full self-driving” will be available in consumer vehicles by the end of the year.

The biggest hurdle, he suggested, was getting the approval of regulators, although Doge may have solved that problem by effectively defenestrating the agency responsible for it in the US.

“The future for Tesla is brighter than ever,” Musk said. “The value of the company is delivering sustainable abundance with our affordable AI talent robots. Sustainable abundance – basically this is the happy future …  the closest thing to heaven we can get on Earth.”