Tesla (TSLA) shares initially rallied after CEO Elon Musk announced plans to significantly reduce his time commitment to the Department of Government Efficiency (DOGE) to just one or two days a week, starting in May. The announcement temporarily eased investor concerns about Musk’s divided attention affecting Tesla’s performance.

However, officials at the White House signaled that Musk’s involvement won’t be drastically curtailed. “Elon’s not going anywhere,” a White House official told MarketWatch. “He will still be here.”

This contradiction raises questions about whether investor optimism was premature. While Musk was already approaching his 130-day limit as an unpaid special government employee, the administration expects his continued involvement in DOGE.

Analysts are now reassessing whether Musk will have more bandwidth for Tesla amid ongoing government efficiency initiatives that have reportedly saved $160 billion to date.

Tesla Stock Misses Estimates in Q1 2025

Tesla stock climbed in after-hours trading last Tuesday despite the electric vehicle maker missing revenue and earnings estimates in Q1. In the March quarter, Tesla reported earnings of $0.27 per share, which was below the estimated $0.39 per share. Its revenue stood at $19.34 billion in Q1, compared to estimates of $21.11 billion. Notably, automotive sales plunged 20% year-over-year to $14 billion, reflecting widespread challenges for the EV pioneer.

Tesla cited several factors for its disappointing quarterly performance, including production line updates for the refreshed Model Y and lower average selling prices. The company also warned about uncertainties in automotive and energy markets due to “rapidly evolving trade policy” and changing political sentiment.

Despite these challenges, Tesla affirmed its commitment to launching unsupervised autonomous driving in Austin by June and beginning production of its cheaper vehicle models this year. Alternatively, executives acknowledged that the ramp may be slower than initially projected. Musk expressed confidence that Tesla remains on track for a “pilot launch” of its autonomous ride-hailing service in Austin this summer.

Energy generation and storage emerged as a bright spot, with revenue jumping 67% to $2.73 billion in the March quarter. Tesla highlighted that growing AI infrastructure demands created opportunities for its energy storage products.

Tesla stock has struggled in 2025, down 30% year-to-date as investors worry about Musk’s divided attention, slowing EV demand, and potential impacts from tariffs. Musk attempted to reassure investors that despite these headwinds, Tesla is nowhere near a crisis point and will eventually become “the most valuable company in the world” as its autonomous vehicle and humanoid robot technologies scale up in the coming years.

Is TSLA Stock a Good Buy Right Now?

Tesla’s adjusted earnings fell by 22.4% year over year in 2024 and are expected to decline by 20.6% to $1.92 per share this year, given consensus estimates. It means TSLA stock is priced at 148x forward earnings, which is quite steep for a company struggling with slowing sales and narrowing profit margins. Analysts expect earnings to improve to $3.80 per share in 2027, which is still lower than the $4.07 per share it reported in 2022. 

Out of the 41 analysts tracking Tesla stock, 16 recommend “Strong Buy,” two recommend “Moderate Buy,” 13 recommend “Hold,” and 10 recommend “Strong Sell.” The average target price for TSLA stock is $284.86, which is in line with the current trading price.