Tesla Stock Gets Some Good News as Elon Musk Announces DOGE Shift
Tesla shares soared in premarket trading on Wednesday after CEO Elon Musk said he would be deprioritizing his work at the Department of Government Efficiency (DOGE).
The stock rose 6.72 percent to $253.96 per share shortly after 6 a.m. ET, extending after-hour gains following the electric vehicle giant’s first-quarter earnings call on Tuesday.
Newsweek contacted Musk for more information via an email to Tesla’s press office.
Why It Matters
Since the second Trump administration began, Musk has been one of its defining figures. As the head of DOGE, he has led some of the government’s most noteworthy changes, including the dismantling of USAID and clampdowns on Social Security spending.
However, Musk’s association with President Donald Trump and continued focus on political work have affected Tesla’s performance both culturally and financially. The company’s stock has declined since January, while protesters have vandalized Tesla vehicles.
What To Know
“I think starting probably next month, May, my time allocation to DOGE will drop significantly,” Musk said during the earnings call, adding that he would be devoting more time to Tesla.
Musk said he would “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.”
The CEO’s time in government has been a turbulent period for Tesla. In the first quarter of the year, the company reported a 13 percent drop in sales and a 71 percent drop in quarterly revenue.
Elon Musk at the Vivatech technology startups and innovation fair at the Porte de Versailles exhibition center in Paris on June 16, 2023.
Getty Images
The decline has been so extreme that Tesla is no longer the largest contributor to Elon Musk’s $350 billion net worth, a distinction that now belongs to SpaceX.
As a special government employee, Musk has a 130-day limit on his job in the federal government, which runs out on May 30. The White House has confirmed that DOGE will continue in some form after Musk departs and that Musk will continue to advise the president.
What People Are Saying
Tesla CEO Elon Musk said during the earnings call: “I’ll have to continue doing it for I think the remainder of the President’s term just to make sure the waste and fraud that we stopped does not come roaring back, which it will do if it has the chance.”
“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 would be useful.”
“I encourage people to look beyond the bumps and potholes of the road immediately ahead of us. Lift your gaze to the bright shining citadel on the hill—I don’t know, some Reagan-esque imagery—and that’s where we’re headed.”
Eric Schiffer, the chair of the private equity firm Patriarch Organization, told Newsweek: “If he backs away, which I believe will happen soon, then memories fade. The ties to DOGE, in time, and the negative sentiment around it will dissipate. Innovation and new products can recapture people’s view of him and that of Tesla.”
What Happens Next
Musk has not confirmed a specific date for his departure from DOGE, though his status as a special government employee is set to end next month. Vice President JD Vance has said the tech CEO will remain a close ally of the White House.