Investing.com -- Tesla (NASDAQ:TSLA) said it was revisiting its full-year guidance after reporting first-quarter results that missed estimates, as deliveries fell well short of expectations amid rising competition and concerns around brand damage due to CEO Elon Musk’s political activities.
Shares of the electric vehicle giant rose by more than 6% in premarket U.S. trading on Wednesday after Musk told analysts on an earnings call that he was planning to ratchet down his commitment to the so-called Department of Government Efficiency, or DOGE.
Trump has become a close adviser to U.S. President Donald Trump, and has helmed a drive by DOGE to downsize the federal government. But his involvement in the White House has caused a backlash that has begun to bleed into his myriad business interests -- especially Tesla, which has faced widespread protests and vandalism at its showrooms. Slumping sales at the electric carmaker have fueled investor calls for Musk to re-focus on managing the company as well.
Against this backdrop, Musk indicated that his time with DOGE will "drop significantly" in the coming months. Musk said he may end up spending a day or two per week on government matters, adding that far more of his time will be focused on Tesla from May.
Tesla announced adjusted earnings per share of $0.27 on revenue of $19.34 billion. Analysts polled by Investing.com anticipated EPS of $0.42 on revenue of $21.4 billion.
The miss on the top and bottom lines comes as automotive sales plunged 20% in the first quarter from the same period a year.
Automotive gross margins, a measure of profitability, fell to 12.5%, down from 13.6% in the fourth quarter. Analysts had estimated 11.8%, according to Visible Alpha projections cited by Reuters..
The company said it would speak again about its 2025 guidance in its second-quarter update, citing the impacts of shifting global trade policy on automotive and energy supply chains, its cost structure and demand.
Musk also reiterated his view that Tesla will eventually be the most valuable company in the world "by far" and may be worth more than the next five companies combined. He said this will require solid execution.
"Tesla [is] expected to remain the U.S. EV leader, with key valuation drivers in autonomous technology [...], as we see regulatory tailwinds favorable despite near-term challenges from EU tariffs/U.S. tax credit repeals, but less of a headwind [...] relative to peers," analysts at Mizuho said in a note to clients.
(Yasin Ebrahim and Frank DeMatteo contributed to this report)