Tesla (TSLA) Stock: Investors Cheer as Musk Hits the Brakes on Politics

TLDR

Table of Contents

Tesla reported its worst quarter for sales in three years with Q1 revenue down 9% to $19.3 billion
Elon Musk announced he’s stepping back from politics to focus on Tesla full-time
Despite poor earnings, Tesla stock has risen over 50% since April earnings report
Musk claims Tesla sales have “already turned around” but provided no specific evidence
Tesla aims to launch robotaxis in Austin in June as its next major business initiative

Elon Musk is returning to Tesla full-time, leaving behind his political activities after a challenging period for the electric vehicle maker.

This shift comes at a critical time for the company. Tesla recently reported a 9% decline in first-quarter revenue to $19.3 billion, missing analyst estimates by $2 billion.

Earnings were equally disappointing at 27 cents per share, falling short of Wall Street expectations by 34%. Auto revenue dropped even more sharply, down 20% year over year to $13.9 billion.

Last month’s report marked Tesla’s worst quarter for sales in three years. Data for April showed continued weakness in demand.

Europe proved particularly challenging. Sales in Germany reportedly fell 62%, with other European markets performing similarly poorly.

“Europe is our weakest market, but we’re strong everywhere else,” Musk stated during an interview at the Qatar Economic Forum this week.

When questioned about turning around Tesla’s declining sales, Musk responded confidently: “It’s already turned around.”

Musk’s New Focus

Musk has served as an unofficial cabinet member in President Donald Trump’s administration, legally permitted to work at the Department of Government Efficiency (DOGE) for up to 130 days.

“In terms of political spending, I’m going to do a lot less in the future,” Musk stated during his Qatar Economic Forum appearance.

This announcement delighted Tesla investors. The stock has jumped more than 50% since opening trading on April 23, the day after its disappointing earnings release.

🚨BREAKING
ELON MUSK SAYS: I WILL DO LESS POLITICAL SPENDING IN THE FUTURE, I HAVE DONE ENOUGH
He's heading back to Tesla in June! He'll be diving into the Robotaxi and Optimus projects big time! $TSLA pic.twitter.com/uBBqPkVqdt
— Tesla Archive (@tesla_archive) May 20, 2025

Musk pointed to this stock performance as evidence things are improving. “Obviously, the stock market recognizes that since we are back over a trillion-dollar market cap,” he said.

He added: “You can just look at the stock price if you want the best inside information. The stock market analysts have that, and a stock wouldn’t be trading near all-time highs if things weren’t in good shape.”

Despite the company’s poor financial results, Musk claims any politically left-leaning buyers who abandoned Tesla have been replaced by people who align with his politics.

He emphasized Tesla has “no problem with demand” but offered no specific evidence to support this claim.

The market’s response suggests investors value Musk’s leadership over current financial results. Tesla shares have increased more than 530% over the last five years.

This performance helps explain why shareholders twice voted to approve Musk’s 11-figure compensation package.

Yet challenges remain beyond immediate sales concerns. Critics have long questioned whether Musk’s divided attention across multiple companies has hindered Tesla’s progress.

Tesla’s Future Direction

Tesla isn’t positioning itself merely as a car company anymore. Its next major initiative is developing autonomous robotaxis, with a planned debut in Austin in June.

This autonomous taxi service represents a significant shift from Tesla’s earlier mission focused on climate-friendly electric vehicles.

Developing this unproven technology and securing regulatory permissions presents substantial challenges, even with Musk’s connections in the Department of Transportation.

The question remains whether Tesla’s next phase can generate the same level of support from investors and consumers as its original mission.

As Musk steps away from politics to focus on Tesla, the company’s stock closed at $343.82 on May 20, up 0.51% for the day.

Pre-market trading showed continued positivity, with shares at $345.48, up 0.48% at 8:20 AM EDT on May 21.

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