Tesla Stock Rebounds After Report Says CEO Elon Musk May Exit DOGE: Retail Is Unmoved

Shares of Tesla Inc. (TSLA) traded 5% higher on Wednesday noon, paring early morning losses, following a report that CEO Elon Musk is stepping back from his role at the helm of the Department of Government Efficiency (DOGE) aimed at cutting federal spending.

Politico reported, citing three Trump insiders, that President Trump has told his inner circle, including members of his Cabinet, that Musk will be stepping back from his role in the government.

The President is pleased with Musk but decided with the billionaire that it would soon be time for the latter to return to his business and take on a supporting role, the report said.

One senior administration official also told Politico that Musk is likely to retain an informal role as an advisor and continue to visit the White House occasionally.

The report added that Musk’s transition is likely to coincide with the end of his status as a special government employee, which will expire in late May or early June.

However, Karoline Leavitt, White House Press Secretary, responded to the report on X, terming it “garbage.”

"This 'scoop' is garbage. Elon Musk and President Trump have both *publicly* stated that Elon will depart from public service as a special government employee when his incredible work at DOGE is complete," Leavitt said.

Tesla shares opened lower on Wednesday morning after the company reported its first-quarter deliveries at 336,681 units, marking a dip of nearly 13% from the corresponding quarter of 2024 and the company’s worst quarterly performance in at least two years.

Following the disappointing delivery report, Tesla bull Wedbush said that Elon Musk "needs to stop this political firestorm and balance being CEO of Tesla with DOGE" and that the CEO "needs to get his act together or else unfortunately darker times are ahead for Tesla."

Tesla shares are down nearly 25% this year. However, last month, Musk urged employees to hold on to their stock in a meeting, promising increased activity over the coming months.

"There are times when there are rocky moments," Musk told Tesla employees. "...the future is incredibly bright and exciting, and we're going to do things that no one has even dreamed of."

On Stocktwits, retail investor sentiment about Tesla fell within the ‘bullish’ territory (59/100) while message volume dropped marginally within ‘normal’ levels over the past 24 hours. 

Tesla shares have gained nearly 70% over the past 12 months.

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