Elon Musk is set to step back from his government role under Donald Trump’s administration while Tesla faces a sales decline.

Elon Musk’s Resignation from Government Cost-Cutting Position

Elon Musk, the richest person in the world, is likely to resign from his position within the Department of Government Efficiency (DOGE) within the Trump administration, according to a recent Politico news report. Musk, who was assigned to cut $1 trillion in government expenditures, is expected to resume his business pursuits within weeks. Nevertheless, the exact timing of his resignation is not known.

A White House official said that Musk would still maintain an informal advisory position and visit the White House on occasion. Another insider implied that Musk’s influence in Trump’s administration would not entirely subside. His transition is slated to occur concurrently with the expiration of his role as a special government employee, which shields him from certain ethics and conflict-of-interest rules.

In spite of speculations that Musk is being ousted, White House Press Secretary Karoline Leavitt shot down such rumors by referring to them as “garbage.” She reaffirmed that Musk’s 130-day mandate would be done as scheduled, highlighting that both Trump and Musk had openly accepted this agreement.

Trump himself weighed in on the situation, saying, “I think he’s amazing, but I also think he’s got a big company to run.” This statement mirrors Musk’s recent comments on Fox News, in which he was optimistic about realizing his cost-reduction objectives within the timeframe, despite criticism over mass government job cuts.

Tesla’s Challenges During Market Turbulence

As Musk is set to step down from his government advisory position, his flagship company, Tesla, is also in for a rough ride. The EV giant saw its vehicle sales drop by 13% in the first quarter of 2025, its weakest since 2022. This dip in sales indicates the increasing difficulty Tesla is having in dominating the market.

Industry experts blame Tesla’s falling sales on a number of reasons, such as an outdated vehicle lineup, rising competition in the EV market, and consumer outrage over Musk’s political leanings. The company’s first-quarter deliveries dropped to 336,681 vehicles worldwide, significantly lower than analysts’ estimates of 408,000, FactSet reported. This also marks a decline from 387,000 vehicles sold during the same quarter last year.

Even with Tesla trying to accelerate sales by cutting prices, offering zero-interest loans, and other offers, consumers do not seem interested. The poor first-quarter figures may lead analysts to worry about the prospect of a grim outlook for Tesla’s earnings announcement due later this month.

What’s Next for Musk and Tesla

Musk’s potential exit from Trump’s government and Tesla’s struggles selling cars represent a turning point in his life. While he is still a leading figure in technology and business, his political and corporate activities become subjected to growing scrutiny. With Musk’s return to Tesla, investors and consumers will closely observe if he can get the EV giant back on the growth path while facing growing challenges.