'If The Ship Of America Goes Down, Tesla Will Go With It' — Elon Musk Says He's Refocusing On Tesla After 71% Profit Drop

Tesla’s TSLA Q1 2025 results offered a reality check for investors: net income plunged 71% year over year to $409 million, while revenue slipped 9% to $19.3 billion. 

“If the ship of America goes down, Tesla will go with it,” CEO Elon Musk warned during the company’s April 22 earnings call, as he addressed the automaker’s grim financial numbers.

The fall in overall revenue in the quarter was quite significant, but automotive revenue — Tesla’s core operation — took an even sharper hit, tumbling 20% to $14 billion. 

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The declines came as no surprise to analysts who have warned that Musk’s involvement in government initiatives, particularly his work with the Department of Government Efficiency, was pulling his attention away from Tesla.

Political Focus Fuels Consumer Backlash

Musk’s role in DOGE has drawn sharp criticism. Policy moves under Musk’s influence — such as mass layoffs and cuts to social services — triggered protests outside Tesla locations across the country. 

Tesla vehicle deliveries fell 13% year-over-year in Q1, aligning with the timing of the protests. According to Morgan Stanley, 85% of Tesla shareholders said Elon Musk’s political visibility has negatively impacted the company’s brand.

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Tariffs, Resale Woes Compound Tesla’s Struggles

Tesla’s challenges extend beyond politics. New U.S.-China tariffs raised material costs and dented profitability, The CFO explained. 

Meanwhile, the used EV market has turned colder; average prices for used Teslas have dropped 7% over the past year, according to Business Insider.

Despite these obstacles, Tesla’s energy generation and storage division offered a rare bright spot. According to the company’s Q1 earnings report, the unit generated $2.73 billion in revenue—up 67% from a year earlier.

Musk Vows to Step Back from Government Work

During the earnings call, Musk reaffirmed his commitment to Tesla’s future. “Starting probably next month in May, my time allocation [at DOGE] will drop significantly,” he said. “I think I 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”

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Looking ahead, Musk outlined plans to launch a more affordable Model Y and kick off a new driverless robotaxi service in Austin by the end of June. These moves are intended to reignite Tesla’s leadership in the increasingly competitive EV market.

Investors React Cautiously as Stock Rebounds Slightly

Following Musk’s announcement, Tesla shares rose nearly 8% on April 23. However, the bump was not enough to reverse the stock’s substantial losses over the past several months. 

Analysts remain cautious about Tesla’s ability to stabilize. “That [Tesla becoming a political symbol] is a very bad thing for the future of this disruptive tech stalwart and the brand crisis tornado that’s now turned into an F5 tornado,” Wedbush analyst Daniel Ives reportedly said in a note on April 6. 

Ives urged Musk to step up, read the room, and be a leader in this time of uncertainty, according to media reports. 

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