Trump’s Tariff Blade Strikes, Musk Not Exempt
The U.S. President Donald Trump wields a hefty tariff knife, and Elon Musk is no exception. Simultaneously, Tesla’s financial report has recorded its worst performance in three years. Musk has announced that he will reduce his work in the White House’s DOGE (Department of Government Efficiency) and focus on his “core business.”
Tesla’s Revenue Hits a Three-Year Low
U.S. President Donald Trump has imposed tariffs on a global scale, with plans to implement a 25% tariff on all imported auto parts in May, and even his close friend and colleague, Elon Musk of Tesla, cannot escape this whirlwind.
The usually confident Musk remained silent for ten seconds during the latest quarterly earnings call, sighed deeply, and helplessly admitted, “I will continue to suggest to the President to lower tariffs, but that’s all I can do.”
Tesla’s Q1 earnings report fell short of expectations, marking its worst performance in nearly three years. The revenue was $19.34 billion, a 9% year-on-year decrease, falling short of the market expectation of $21.37 billion. The automotive revenue stood at $16.35 billion, down 20% year-on-year, while net profit plummeted by 71%, dropping from $1.39 billion in the same period last year to just $409 million, with earnings per share at $0.27, significantly below the expected $0.41.
CNN anchor Erin Burnett sharply commented on the program, “Musk’s empire has suffered a significant blow tonight.”
Moreover, Musk will soon face the onslaught of tariffs, as the Trump administration announced that it will impose tariffs of up to 25% on Chinese auto parts, set to take effect in May. Analysts point out that although Tesla enjoys advantages from a local supply chain in the U.S., key batteries and many important components still heavily rely on imports from China.
Global shipping tracking systems indicate a 44% drop in the number of ships traveling from China to Southern California, illustrating that supply chain tensions are not unfounded. CNN commented that Musk is currently at the core of the “tariff war,” with both the U.S. and China markets facing setbacks, and future operational pressures are expected to increase.
After a ten-second silence in the earnings call, Musk stated, “Tariffs are very difficult for a company, especially when profits are already low.” He believes that Tesla still has advantages over other automakers due to its local supply chain in the U.S. He emphasized that he will continue to provide relevant suggestions to President Trump, “but of course, he makes the final decision.”
Additionally, foreign media pointed out that Tesla’s profit performance decline is related to the “Tesla takedown” actions occurring in some regions. Musk’s role in the Trump administration has sparked calls to boycott Tesla. Although organizers claim that most protests are peaceful, some events have escalated into arson and vandalism, affecting Tesla display spaces and charging stations.
In fact, Tesla’s stock price has plummeted over 40% since the beginning of the year, with a market value evaporating by more than $130 billion (approximately NT$4.16 trillion).
DOGE’s Role Changes, Musk to Significantly Reduce Involvement
During the 2024 presidential election period, Musk invested nearly $300 million to assist Trump in returning to the White House, establishing the DOGE (Department of Government Efficiency) and serving as a special government employee, dedicated to reducing the size and costs of the government. According to DOGE’s official website, the department has achieved approximately $160 billion in budget savings to date, although some data has been questioned and removed.
However, Musk stated in this earnings call that starting in May, he will “significantly reduce” the time he spends on DOGE. In the future, he will only spend one to two days a week handling government-related matters, saying, “As long as the President needs me, I will support him.”
Musk began working as a “special government employee” in the White House part-time in early February this year. According to U.S. Department of Justice regulations, a “special government employee” refers to individuals who work for the government for no more than 130 days within a year, and the Trump administration is expected to reach this threshold by the end of May.
In response, Trump remarked, “At some point, we will have to let him make that decision. I will talk to Elon again.”
This article is a collaborative reprint from: Digital Age
Source: CNBC, BBC
This article was initially drafted by AI, edited by Qian Yuhong.