Tesla shares rally as Musk reduces DOGE involvement amid Q1 sales slump
Tesla (TSLA) shares are poised for a strong opening in U.S. trading after CEO Elon Musk announced plans to scale back his role in the White House’s Department of Government Efficiency (DOGE). The move comes as Tesla faces declining sales and profits in Q1 2024, compounded by backlash over Musk’s political ties and rising competition from Chinese EV makers.
Musk Shifts Focus Back to Tesla
In a late Tuesday announcement, Musk confirmed he would reduce his White House involvement to just one or two days per week, easing investor concerns about his divided attention. His deep ties to the Trump administration’s cost-cutting initiatives had sparked public criticism, including vandalism at Tesla showrooms.
Despite acknowledging the controversy, Musk denied that his DOGE role directly impacted Tesla’s performance. His renewed commitment to the automaker sent shares up 5% in pre-market trading, following a 3.1% gain on Tuesday.
Trade War Relief Boosts Tesla Stock
Further lifting investor sentiment, U.S. policymakers hinted at easing trade tensions with China—a critical development for Tesla, which relies on Chinese supply chains and U.S. consumer demand.
Since peaking in December, Tesla’s stock had plummeted nearly 50% due to weak sales and trade war fears. However, Musk’s decision to refocus on Tesla has reignited optimism.
Analysts Upgrade Tesla Price Target
Wedbush analysts raised their Tesla price target from $315 to $350, citing Musk’s renewed leadership as a turning point.
“The brand damage from Musk’s White House role won’t disappear overnight,” they noted. “But this move allows Tesla to refocus on autonomy and robotics—key growth drivers. While tariffs and competition remain challenges, Musk’s return as full-time CEO is the best news investors could have hoped for.”
