Tesla Inc. has reported a staggering 71% decline in first-quarter profits for 2025, marking a significant downturn for the electric vehicle giant. The company attributes this sharp drop to a combination of factors, including aggressive price cuts, increased competition, and a tarnished brand image linked to CEO Elon Musk’s controversial political activities.

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In response to the financial setback, Musk announced plans to reduce his involvement with the Department of Government Efficiency (DOGE), a position he holds under President Donald Trump’s administration. He stated that his time allocation to DOGE would “drop significantly” starting next month, aiming to refocus his efforts on Tesla’s core operations. Despite this, Musk indicated that he would maintain some level of involvement with DOGE for the remainder of the president’s term .​The decision to scale back his government role comes amid widespread backlash against Musk’s political affiliations, which have reportedly led to protests and a decline in consumer sentiment, particularly among left-leaning electric vehicle buyers in the U.S. and Europe . Analysts suggest that while Musk’s reduced involvement with DOGE may help alleviate some brand damage, the long-term effects on Tesla’s reputation could persist

Tesla’s financial challenges are compounded by a 9% year-over-year revenue decline and a 13% drop in vehicle deliveries. The company has also faced increased competition from domestic electric vehicle brands in China, which now outpace Tesla in innovation .​

Despite these hurdles, Tesla remains committed to its long-term vision, with plans to launch new vehicles, including more affordable models, and continue development on its robotaxi program. However, analysts caution that the company’s ability to recover will depend on its capacity to rebuild consumer trust and navigate the evolving political and economic landscape.

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As of the latest market data, Tesla’s stock price stands at $250.74, reflecting a 5.4% increase from the previous close. While this uptick may indicate short-term investor optimism following Musk’s announcement, the company’s long-term prospects remain uncertain amid ongoing challenges.