Tesla’s stock surged nearly 8% on April 23, 2025, closing at $250.74, despite reporting a 71% decline in first-quarter net profit. The boost came after CEO Elon Musk announced plans to reduce his involvement with the U.S. government’s Department of Government Efficiency (DOGE) to concentrate more on Tesla’s operations.
The company’s Q1 2025 earnings revealed a net income of $409 million, down from the previous year, with revenue falling 9% to $19.34 billion. Vehicle deliveries also dropped by 13%. Analysts attribute the downturn to declining sales, public backlash over Musk’s political affiliations, and increased competition in the electric vehicle market, notably from Chinese and European manufacturers.
Investors reacted positively to Musk’s renewed focus on Tesla, with shares rising over 5% in after-hours trading following his announcement. Despite the profit slump, Tesla reaffirmed plans to launch a lower-cost Model Y and introduce a driverless robotaxi service in Austin by June, aiming for widespread autonomous vehicle operation by year-end.
However, skepticism remains regarding the readiness of Tesla’s self-driving technology, which is under federal investigation. Additionally, the company faces tariff challenges and reduced sales in China due to geopolitical tensions.
While Musk’s decision to step back from political roles has provided a temporary boost to investor confidence, analysts warn that the long-term brand damage could be harder to reverse.
