Tesla sales plunge to 3-year low after Musk backlash; shares rally on report of his Doge exit

NEW YORK – Tesla’s worldwide sales tumbled in the first quarter, figures showed on April 2, piling further pressure on chief executive Elon Musk, who faces

growing backlash

for his role in overseeing US federal spending cuts under President Donald Trump.

Investors, however, bid up Tesla shares in the hope that Mr Musk will step back from his work for the Trump administration. 

While the billionaire has yet to make a formal announcement about his plans, a report by Politico on April 2 suggested that his time as a top adviser to Mr Trump may end soon. The President told his inner circle recently that the Tesla CEO will return to his businesses in the coming weeks, according to the news outlet, which cited unidentified Trump insiders.

Tesla’s stock jumped as much as 6.2 per cent following the report, reversing earlier declines, and closed the regular session up 5.3 per cent. The shares barely budged after White House press secretary Karoline Leavitt called Politico’s story “garbage”, which Mr Musk reposted with the comment “yeah, fake news”.

Tesla’s sales have been on a steep downward trend around the world. The company said on April 2 that its global sales in the first three months of 2025 fell 13 per cent from a year earlier.

The quarterly figures were the lowest in nearly three years and lagged analyst expectations, as Tesla pointed to the “loss of several weeks of production” while it ramps up upgrades for its Model Y output.

Mr Musk, the world’s richest person, donated some US$270 million (S$362.1 million) to Mr Trump’s 2024 presidential campaign.

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

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

Mr Dan Ives, a prominent technology analyst at Wedbush Securities and a long-time 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 Mr Ives, who has called for Mr Musk to publicly outline how he is balancing his Tesla commitments with his work for Mr 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 Mr Musk and his car company.

While Tesla’s release on April 2 did not give a breakdown on Cybertruck deliveries, the figures suggest anaemic sales for the futuristic vehicle, which Mr 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 the national auto authorities have shown big drops across Europe, where Mr Musk’s association with Mr Trump has sparked criticism.

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

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

Leaving soon?

Politico reported that Mr Musk will

soon retreat from his role with Mr Trump

, citing unnamed sources who described frustration within the White House at the Tesla chief’s unpredictability.

The article also cited concerns that Mr Musk has become a political liability, noting that a Musk-backed judicial candidate in Wisconsin was soundly defeated by a liberal on April 1.

Mr Trump himself signalled a potential change, praising Mr Musk as “amazing” on March 31 in the Oval Office.

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

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

Politico quoted sources saying Mr Musk would remain as an informal adviser. AFP, BLOOMBERG