Tesla Stock Rallies After Report of Musk Stepping Back from Government Role

Tesla Stock Rallies After Report of Musk Stepping Back from Government Role

Tesla Stock Rebounds Despite Weak Q1 Deliveries

Tesla Inc. (NASDAQ: TSLA) saw a sharp recovery in its stock price on Wednesday, reversing early losses after reports suggested that CEO Elon Musk would scale back his involvement in the Trump administration in the coming weeks. The stock initially dropped as much as 4% following weak Q1 delivery numbers but closed the session up 5.3%.

Musk to Step Back from Government Role

According to a Politico report by Rachael Bade, President Donald Trump has informed his inner circle, including members of his Cabinet, that Elon Musk will be stepping back from his current advisory role.

While Musk is expected to retain an "informal" advisory position, the shift comes amid growing pressure from Wall Street analysts—most notably Dan Ives of Wedbush Securities—urging Musk to refocus on Tesla. The company’s stock has fallen 50% from its December 2024 highs, raising concerns about leadership priorities.

This report surfaced just before Trump’s scheduled "Liberation Day" press conference, where the president is expected to announce new tariff policies.

Tesla’s Worst Quarterly Delivery Results Since 2022

Tesla’s stock initially dipped following the release of its Q1 2025 delivery data, which widely missed analyst expectations:

• Q1 Deliveries: 336,681 vehicles (vs. 390,342 expected, per Bloomberg consensus)

• Lowest delivery total since Q2 2022

• Production disruptions contributed to the shortfall

Tesla attributed the weak delivery numbers to the global Model Y production changeover, which led to several weeks of lost production across all four of its factories. Despite this, the company assured investors that the ramp-up of the New Model Y—which launched globally in March—was progressing well.

European Sales Decline Amid Demand Concerns

Tesla's sales in Europe saw sharp declines in several key markets, raising further demand concerns:

• France: 3,157 registrations (-36.8% YoY)

• Norway: 2,211 registrations (-63.9% YoY)

• Sweden: 911 registrations (-1% YoY)

• Denmark: 593 registrations (-65.6% YoY)

• Netherlands: 1,536 registrations (-61% YoY)

Tesla does not report regional sales figures, but registration data serves as a close proxy for actual sales. The sharp declines in Scandinavian countries, traditionally strong markets for Tesla and EVs, suggest shifting consumer sentiment and increased competition.

Investor Outlook

While the report of Musk stepping back from his government role gave Tesla’s stock a short-term boost, broader concerns about demand, pricing pressure, and leadership distractions remain. Investors will closely watch for further updates on Tesla’s production recovery and market strategy in the coming months.