After an initial fall of more than 6%, following weak first-quarter auto sales, Tesla shares rebounded on Wednesday, April 2, following Politico reporting that CEO Elon Musk would soon step back from his work for US President Donald Trump's administration, a role that has weighed on his electric car brand. Shares jumped 3.8% shortly after midday, later rising 5%.
Politico reported that Musk would be "stepping back in the coming weeks" from his role with Trump, quoting unnamed sources who described frustration within the White House at the Tesla chief's unpredictability. Politico quoted sources saying Musk would remain an informal advisor. The article also cited concerns that Musk has become a political liability, noting that a Musk-backed judicial candidate in Wisconsin was soundly defeated by a liberal on Tuesday.
Trump himself signaled a potential change, praising Musk as "amazing" late Monday in the Oval Office. "I also think he's got a big company to run," Trump added, "and so at some point he's going to be going back. He wants to." Trump said he expects Cabinet secretaries to succeed with Musk's mission, saying of DOGE, "at a certain point, I think it will end."
'These numbers suck'
Earlier on Wednesday, Tesla had reported a 13% drop in first-quarter auto sales, amid lower production during factory upgrades and blowback over Musk's work for the Trump administration. The news also came as a warning that the company's first-quarter earnings report, due later this month, could disappoint investors.
Musk's electric vehicle company delivered 336,681 units in the quarter ending March 31, under analyst expectations and down from sales of 387,000 in the same period a year ago, as it pointed to the "loss of several weeks of production" while it ramps up upgrades for its Model Y output.
Electric car sales have been sluggish in general, and Tesla, in particular, is suffering as car buyers hold off from buying its bestselling Model Y because of plans for an updated version later this year. While Tesla's release on Wednesday did not break out Cybertruck deliveries, the figures suggest anemic sales for the futuristic vehicle, which Musk has passionately embraced. In March, Tesla announced it was recalling essentially all Cybertrucks because of an exterior panel defect.
Tesla shareholder Ross Gerber of Gerber Kawasaki Wealth and Investment Management, who has previously called for the board to remove Musk as CEO, slammed the figures on X. "These numbers suck," Gerber posted. "The Cybertruck is basically not selling. The brand is broken and may not be fixable. The board of directors is 100 percent responsible."
Tesla also did not specify deliveries by country, but figures from national auto authorities have shown big drops across Europe, where Musk's association with Trump has sparked criticism.
Tesla's stock has plunged by roughly half since hitting a mid-December record, as expectations of a lighter regulatory touch and big profits with Trump as president were replaced by fear that a boycott of Musk's cars and other problems could hit the company hard.
Since Trump returned to the White House, Tesla has been targeted by consumer boycotts and vandalism as Musk has helped engineer thousands of job cuts across the US government while aggressively attacking Trump critics on the Musk-owned social media platform X.