Tesla (TSLA) stock jumped nearly 5% in after-hours trading on Tuesday, even as the company posted weak auto sales and a steep 71% profit drop in the first quarter. The reason? Elon Musk is pulling back from his work in Washington.
“My time allocation will drop significantly,” Musk said during the earnings call, referring to his role in the Department of Government Efficiency (DOGE). Starting in May, he’ll spend just one or two days a week on federal matters. That’s a big shift for a CEO who’s faced heat for spreading himself too thin.
Bad Quarter, But Good Vibes
Tesla’s first-quarter earnings were far from electric. Revenue dropped 9% to $19.3 billion, falling short of Wall Street’s $21.11 billion estimate. Automotive sales, the company’s core business, tumbled even more, down 20% year-over-year to $14 billion. Meanwhile, EPS came in at $0.27, below the consensus expectation of $0.41 per share.
Still, the market shrugged off the numbers because Elon Musk is turning his full attention back to Tesla. That shift in tone was enough to lift investor sentiment. Wedbush analyst Dan Ives called it “a big step in the right direction,” and investors agreed, sending the stock up.
Musk’s Focus Back on the Road
Musk didn’t just talk about priorities. Instead, he laid out a complete game plan. With his time in Washington set to drop “significantly,” he’s now steering more focus toward rolling out Tesla’s new products.
Tesla now plans to fast-track a lower-cost Model Y, a strategic move to boost volume and support margins during a cautious demand environment.
He also confirmed the long-awaited debut of Tesla’s fully autonomous robotaxi, set to roll out in June, starting in Austin, Texas, with a limited fleet of 10–20 Model Y vehicles. These cars will run on updated full self-driving software. If successful, it could shift Tesla’s image from EV pioneer to mobility-tech powerhouse.
DOGE Dreams Are on Hold
Though Musk says he’ll still support government efforts “where needed,” it’s clear the DOGE is no longer center stage.
The stock, down over 41% year-to-date, finally caught a break. For investors and Tesla fans alike, this was a win. The stock is climbing, and the message is clear: Elon Musk is back in the driver’s seat.
Is Tesla a Buy, Sell, or Hold?
Overall, TSLA stock has a Hold consensus rating on TipRanks, based on 16 Buys, 11 Holds, and 12 Sell ratings. Also, the average Tesla price target of $290.62 implies 22.91% upside potential from current levels.
