Tesla shares initially fell more than 6%, but they bounced following a news report that Trump will soon scale back Musk’s involvement, viewing him as a political liability.

Musk, the world’s richest person, donated some US$270 million ($470m) to Trump’s 2024 presidential campaign.

After Trump was elected, Musk launched the “Department of Government Efficiency” or Doge, which has become a lightning rod over its murky legal standing and questions about Musk’s conflicts of interest and public accountability as an unelected figure driving radical change.

Since Trump returned to the White House, Tesla has been targeted for consumer boycotts and vandalism as its chief executive has helped engineer thousands of job cuts across the US government while aggressively attacking Trump critics on the Musk-owned X social media platform.

Wedbush’s Dan Ives, a prominent technology analyst and longtime believer in Tesla’s growth potential, called the figures “a disaster on every metric”, according to a note.

“It’s a fork in the road moment,” said Ives, who has called for Musk to publicly outline how he is balancing his Tesla commitments with his work for Trump.

“The more political he gets … the more the brand suffers, there is no debate. This quarter was an example of the damage Musk is causing Tesla,” he added, calling early 2025 “a moment of truth” for Musk and his car company.

Ives and other long-term Tesla bulls have viewed the EV maker as poised for potentially massive growth, viewing Musk as a guru in state-of-the-art autonomous driving and artificial intelligence technology expected to play a growing role for the foreseeable future.

Leaving soon?

Politico reported that Musk will soon retreat from his role with Trump, citing unnamed sources who described frustration within the White House at the Tesla chief’s unpredictability.

The article also cited concerns that Musk has become a political liability, noting that a Musk-backed judicial candidate in Wisconsin – a state Trump carried in November – was soundly defeated by a liberal on Tuesday.

Trump himself signalled a potential change, praising Musk as “amazing” late Monday in the Oval Office.

“I also think he’s got a big company to run,” Trump added, “and so at some point he’s going to be going back. He wants to.”

Trump said he expects Cabinet secretaries to succeed with Musk’s mission, saying of Doge, “at a certain point, I think it will end”.

Politico’s quoted sources saying Musk would remain an informal adviser.

Anemic Cybertruck sales

While Tesla’s release Wednesday did not break out Cybertruck deliveries, the figures suggest anemic sales for the futuristic vehicle, which Musk has passionately embraced.

In March, Tesla announced it was recalling essentially all Cybertrucks because of an exterior panel defect.

Tesla also did not specify deliveries by country, but figures from national auto authorities have shown big drops across Europe, where Musk’s association with Trump has sparked criticism.

In Germany, home to Tesla’s European factory, new-vehicle registrations fell 76.3% in February compared with the same period last year, according to the country’s Motor Transport Authority, according to a Wall Street Journal report.

In the US, where the total EV market grew, GM and Kia released new electric models and increased their market share while Tesla deliveries fell 2%. In California, the state that consistently sees the largest electric vehicle sales, Tesla new registrations slumped 11.6% over 2024. Global EV sales leader BYD does not sell its electric cars in the US, where the Biden administration made its passenger vehicles the subject of a 100% tariff – set to be increased to 120% or 125% with Trump’s “Liberation Day” policy reveal.

Tesla shareholder Ross Gerber of Gerber Kawasaki Wealth and Investment Management, who has previously called for the board to remove Musk as CEO, slammed the figures on X.

“These numbers suck,” Gerber posted. “The Cybertruck is basically not selling. The brand is broken and may not be fixable. The board of directors is 100% responsible.”

– Agence France-Presse. With reporting by Herald staff.