Tesla stock rises 7% after Musk says time at DOGE will drop 'significantly'

Tesla (TSLA) stock rose as much as 7% early Wednesday after CEO Elon Musk said he would spend more time at Tesla and less time in Washington, D.C., news that overshadowed a challenging quarter for the company that saw results come in far below Wall Street forecasts.

"Starting early next month, in May, my time allocation to DOGE [Department of Government Efficiency] will drop significantly," Musk told investors on the company's earnings call.

Musk said he'd continue to spend a day or two per week at DOGE, but said he will be "allocating far more of my time" to Tesla.

Tesla reported first quarter revenue of $19.34 billion, below the $21.43 billion Wall Street was forecasting and the $21.3 billion reported a year ago, according to Bloomberg estimates. Tesla posted adjusted earnings per share of $0.27, missing the $0.44 forecast by analysts. Adjusted profits in the quarter fell 40% from a year ago.

Read more about Tesla's stock moves and Wednesday's market action.

Tesla said plans for new affordable vehicles are on track for start of production in the first half of 2025 and that it still expects Robotaxi volume production starting in 2026. Along with Robotaxi testing, these were two big investor concerns heading into earnings.

The company blamed trade uncertainty as a reason behind slumping sales.

"Uncertainty in the automotive and energy markets continues to increase as rapidly evolving trade policy adversely impacts the global supply chain and cost structure of Tesla and our peers," the company said in a statement. "This dynamic, along with changing political sentiment, could have a meaningful impact on demand for our products in the near-term."

Musk said on the call that he told Trump that "lower tariffs" were better for the country but ultimately the decision on tariffs is up to the president.

Because of this uncertainty, Tesla said it would revisit its 2025 guidance in its second quarter financial update and removed its long-term growth forecast.

Read more: What Trump's tariffs mean for the economy and your wallet

Tesla said its first quarter gross margin hit 16.3%, better than the 16.1% expected, with automotive gross margin ex-regulatory credits coming in at 12.5%.

In the past, Tesla had promised to launch a lower-priced electric vehicle in the first half of 2025, along with other new vehicles that the company said would allow it to return to a 50% growth rate compared to 2023.

Reuters reported on Friday that Tesla's plans to launch an affordable EV, which include a stripped-down version of the Model Y, have been delayed until later this year. Tesla has not responded to that report.