Tesla CEO Elon Musk said he would soon be spending less time with the Trump administration after first-quarter earnings fell short of expectations.
Net income for the quarter was down 71% after a decline in vehicle deliveries, with Tesla battling growing competition from foreign brands, shifting trade policies and growing backlash to the brand after Musk aligned himself with the Trump administration.
“There are some challenges, and I expect that this year will be, there will probably be some unexpected bumps this year,” Musk said during a Tuesday earnings call. “But I remain extremely optimistic about the future of the company.”
The slump comes as Tesla, along with other automakers, adjust to auto tariffs imposed by President Donald Trump. In a Tuesday financial report, Tesla said “rapidly evolving trade policy” has impacted the global supply chain and the company’s cost structure.
While Tesla assembles its vehicles in the U.S., the automaker is exposed to tariffs because it imports parts from other countries.
“I’ve been on the record many times saying that I believe lower tariffs are generally a good idea for prosperity, but this decision is fundamentally up to the elected representative of the people, being the president of the United States,” Musk said. “I’ll continue to advocate for lower tariffs rather than higher tariffs, but that’s all I can do.”
Tesla also noted that “changing political sentiment” could have an impact on product demand in the near term. The company has faced backlash after Musk began work with the Trump administration’s DOGE, the initiative that has fired tens of thousands of federal workers.
Dealerships have suffered vandalism and protests, and polls from Pew Research and CNBC show roughly half of Americans have negative views of the billionaire tech mogul. Shares had plummeted, ending Tuesday about 50% down from their December peak. And first-quarter deliveries were down 13% from a year ago, although Tesla said that was due in part to the company losing production time as it updated factories to produce the new Model Y.