A more 'mindful' Elon Musk looks to save Tesla: What Wall Street is saying (2025)

Wed, Apr 23, 2025, 5:26 AM 3 min read

Looking down the barrel of a tough year post a rough first quarter, billionaire Elon Musk wasted no time on Tesla’s (TSLA) earnings call Tuesday, acknowledging the EV maker’s biggest roadblock ahead.

It's not Trump tariffs, although they will prove far from a friend.

The real issue is the outsized time he’s spending as President Trump’s controversial DOGE master. And he finally clearly articulated what must be done to jumpstart an automaker that saw sales tank 9% from the prior year and margins fall off a cliff.

Listen: What Trump tariffs mean to semiconductors

“Starting in May, my time allocation to DOGE will drop considerably," Musk said on the call.

The path to renewed sales and profit growth won’t be easy, however.

The Tesla brand will likely continue to feel blowback from Musk’s outspokenness on government policies. At the same time, tariff policy stands to hammer margins given Tesla’s exposure to solar panels from China and autos being made outside the US.

The uncertainty on how quickly the more engaged Musk can fix Tesla is something execs pointed to on the earnings release — Tesla yanked its 2025 financial guidance, promising to revisit it when second quarter results hit.

Shares rose 7% in premarket trading on Wednesday as the bulls cheered Musk's comments on his government work. The company's ticker page was the No. 1 most active.

Here's what you need to know in the wake of Tesla's earnings report.

1. Musk still said he plans to spend one to two days per week on his DOGE role. That commitment could extend through the length of Trump's term as president.

2. Musk said he remains an advocate of "lower tariffs" and will continue to make that case to Trump.

3. Tesla hasn’t disclosed any definitive financial impact from Trump’s tariffs or the US-China trade war. The company faces multiple exposures, from its Mexico plant and China operations to sourcing materials for its solar business.

4. Musk says the company is on track to launch a paid ride-hailing service in Austin in June. Ride-hailing not expected to be "material" to profits until mid-2026, Musk said.

5. Execs said on the earnings call that "vandalism" to Tesla cars due to Musk's government involvement has hurt demand in "certain" markets.

Read more: What Trump's tariffs mean for the economy and your wallet

What Wall Street is saying about Tesla's quarter

• "It is very likely Tesla will take a pause with its AI Investments," Global Equities Research analyst Chip Chowdry wrote. "In 2024 Tesla invested between $3 billion and $4 billion, and so far those investments have resulted in 'zero' results — just lab experiments. At the start of 2025, Tesla indicated that they will keep their AI Investments at the same level as 2024."
  

• "Elon’s tone [in focus]," Evercore ISI analyst Chris McNally wrote. "Mindful Elon came out of gate discussing DOGE and plan to re-allocate time to Tesla starting in May, while also (unsurprisingly) focusing on AI during call noting potential for scale (thanks to 'generalized AV solution') and financial contribution (second half 2026 before going 'exponential') of robotaxi offering, likely why stock is up."
  

• "Consensus will likely continue to be revised down following the earnings miss — the quantum of the miss was largely within low buy-side expectations and the company remained free cash positive,” Morgan Stanley analyst Adam Jonas wrote.
  

• "Mixed AI updates," Truist Securities' William Stein wrote. "The PR states that Tesla remains on track for pilot launch of the Robotaxi in Austin by June, and builds of Optimus [robots] on its Fremont pilot production line in 2025. The company expects wider deployment of bots doing useful work across its factories. The PR cited FSD (supervised) delivery in China, but was less promotional than it typically is on the performance improvements of full-self driving."