Elon Musk finally acknowledged what must be done to rescue Tesla

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Brian Sozzi · Executive Editor

Wed, Apr 23, 2025, 6:41 AM

Elon Musk wasted no time on Tesla’s (TSLA) earnings call late Tuesday acknowledging the EV maker’s biggest roadblock to sunnier financial days. That is his outsized time being spent at President Trump’s controversial DOGE master. And he finally clearly articulated what must be done to jumpstart an automaker that saw sales and profits fall off a cliff in the first quarter. “Starting early next month, 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 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.

00:00 Speaker A

Let's throw a minute on that shot clock here. Got to start with Tesla, stock of the day. Yet again, shares are getting a pop here as Elon Musk hopped on that earnings call, which I hope you listened to on Yahoo Finance Live because you could now do that. We could watch earnings calls on Yahoo Finance. I listened to it on our platform. It was killer. So Elon Musk hops on this earnings call after sales dropped, uh, 9%, profits down 71%, said he's starting quote, "Starting in May, my time allocation to Doge will drop considerably." Market is reading that is that Elon Musk will be back more engaged than ever before. Things will get great. Eh, let me just level set here. Three things. I see three challenges, uh, Musk is going to face very, very soon or as soon as he gets more engaged back in this business. First up, solar, uh, Tesla talked a lot about this on the earnings call where it gets its solar panels from, it will be impacted by tariffs. That is a big challenge. Challenge number two, Elon has to improve demand. Sales have fallen off a cliff because in many respects what he has done with Doge and how outspoken he has been on X, that does not change overnight, especially when average selling prices for Teslas are declining. And then last but not least, uh, the company's expenses continue to rise faster than sales. They were up 9% in the most recent quarter as the company invests aggressively in AI. That will not change overnight. Tesla continues to invest a lot in AI. So I'm not sure what Musk will have to do about that, but again, a lot of optimism on the returning Elon Musk. And I am totally over, uh, over my time. No surprise, because I just completely ignore the shot clock every single time.