Elon Musk’s decision to step back from DOGE, the Department of Government Efficiency created under the Trump administration, has triggered a sharp rally in Tesla’s stock. The news broke during Tesla’s Q1 2025 earnings call, during which Musk revealed he would significantly reduce his role in the controversial federal program starting in May.
“I’ll still be around if the president needs me,” Musk told investors, “but I won’t be as involved.” The statement came on the heels of a difficult financial quarter for Tesla—marked by a 20% decline in automotive revenue and a 71% drop in net income, its worst performance since 2022.
The market’s immediate response to Musk’s pivot away from Washington was clear: Tesla shares surged nearly 9% in after-hours trading, as investors interpreted the move as a recommitment to Tesla’s core mission.
A Washington Experiment Winds Down
When Elon Musk stepped into DOGE in 2024, it was with bold promises and sweeping ambition. He joined the task force shortly after contributing $300 million to Donald Trump’s re-election campaign, a move that raised eyebrows across political and business circles. Appointed as a special advisor, Musk quickly became the public face of a radical initiative to slash government waste and streamline bureaucracy.
DOGE claimed it had saved more than $160 billion through drastic agency cuts and program consolidations. However, the program drew heavy criticism from within the federal government. Reports emerged of DOGE personnel ousting department heads, seizing control of operations, and even installing white noise machines in key offices to monitor conversations.
As scrutiny intensified, the DOGE website quietly removed several inflated cost-saving projections. Critics argued the initiative was more about political theater than real reform.
Now, as Elon Musk steps back from DOGE, some insiders suggest his departure is as much about legal timing as it is about optics. Musk is approaching the 130-day limit for “special government employees,” a legal classification that allows for short-term federal service without full ethics disclosures. Unless reappointed, he must leave his role by early May.
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Tesla’s Tumultuous Year
While Musk was engaged in political reform, Tesla was struggling. Over the past year, the company has seen its market cap plunge by more than $600 billion, fueled by production delays, reduced deliveries, and widespread investor uncertainty.
His political entanglements, including vocal support for Germany’s far-right AfD party, only deepened the crisis. Protests broke out in Europe and the United States, with demonstrators calling for boycotts and government scrutiny of Tesla’s operations.
Several analysts have blamed Musk’s split attention for Tesla’s poor performance.
“He’s one of the most brilliant minds in tech,” said Angela Torres, an equity strategist at Broadview Capital. “But you can’t run a company like Tesla on autopilot. Elon Musk stepping back from DOGE could be exactly what the company needs.”
A Recentered Vision?
Now that Musk is stepping back from DOGE, there’s growing optimism that Tesla may regain momentum. The company is preparing to announce updates on its long-delayed Robotaxi initiative, while also investing in AI development and next-generation battery production.
Musk is also expected to re-engage with SpaceX’s Mars program and Neuralink’s human trial phase. Meanwhile, X (formerly Twitter) continues to roll out new AI-driven content algorithms—a project Musk has championed personally.
Whether this marks a lasting shift in focus remains to be seen. But one thing is clear: both Wall Street and Silicon Valley are betting that Elon Musk stepping back from DOGE could be the beginning of a Tesla resurgence.
