On Wednesday, April 2, 2025, shares of Tesla Inc. experienced a remarkable rally, closing up 5.6% at $283.54 per share. This increase followed the publication of a report by Politico that Tesla CEO Elon Musk plans to step down from his role as an advisor to President Donald Trump's administration in the coming weeks.

Musk has been playing a key role at the Department of Government Efficiency (DOGE), leading initiatives to reduce government spending and restructure various federal agencies. However, his involvement in government has generated controversy and has come under fire, especially due to his aggressive methods and controversial decisions, such as the closure of the U.S. Agency for International Development (USAID).

The news of his possible departure coincides with the release of Tesla's first quarter results, which showed a 13% decline in vehicle deliveries compared to the same period last year. The company delivered 336,000 vehicles, below analysts' estimates that expected around 390,300 units.

In addition, Tesla has faced increasing competition in the electric vehicle market, especially from Chinese manufacturer BYD, which reported a 58% increase in sales during March.

Musk's possible retirement from his government role has been welcomed by investors, who hope that this will allow him to refocus on managing Tesla and addressing the challenges facing the company in an increasingly competitive market.

A major ally on the campaign trail

In the 2024 election cycle, Musk emerged as a prominent supporter of then-candidate Donald Trump. Musk contributed approximately $291 million to the Republican campaign and other party causes.

After the election victory, Musk proposed the creation of a "government efficiency commission" aimed at auditing and restructuring federal spending. President Trump embraced the idea and, in November 2024, announced the formation of the Department of Government Efficiency (DOGE), appointing Musk and businessman Vivek Ramaswamy as leaders of the initiative.

The DOGE was formally established by executive order in January 2025, with the goal of reducing government spending by up to $2 trillion by 2026. Among its first actions, the department implemented significant cuts at several federal agencies, including reducing staff at the Securities and Exchange Commission (SEC) and closing the U.S. Agency for International Development (USAID).

Musk's tenure at the helm of the DOGE has been the subject of controversy. While some praise his efforts to eliminate unnecessary spending, others criticize the speed and depth of the cuts, pointing to possible negative impacts on government functionality and public services. In addition, his active involvement in government has led to tensions with certain political and business sectors.

Recently, reports indicate that Musk plans to retire from his role in government in the coming weeks to focus again on his private businesses. This decision coincides with challenges in his business, including a decline in Tesla's vehicle deliveries and increasing competition in the electric vehicle market.

Musk's eventual departure from DOGE would mark the end of a period in which he combined business and government roles, leaving a significant imprint (positive and negative) on the U.S. public administration.