Musk Steps Back From DOGE, Tesla Stock Rebound

Tesla’s stock jumped over 2% in overnight trading to $364 after CEO Elon Musk announced his departure from the Trump administration, signaling a renewed commitment to the electric vehicle giant and easing investor fears about his widening political footprint.

Musk’s exit from his role as Special Government Employee overseeing the Department of Government Efficiency (DOGE) under President Trump was confirmed by the White House yesterday, sparking optimism among Tesla investors.

The news followed a 1.65% dip in Tesla shares during regular trading hours on Tuesday, but overnight gains pushed the stock to $364, reflecting market confidence that Musk will now refocus on Tesla’s core operations.

Musk confirmed his exit in a May 29 X post, thanking President Trump and pledging that DOGE's mission of streamlining federal bureaucracy would continue within the government.

“As my scheduled time as a Special Government Employee comes to an end, I would like to thank President @realDonaldTrump for the opportunity to reduce wasteful spending."

Musk Gives Up, Admits DOGE was a Uphill Battle

During his interview with Washington Post, the billionaire described his mission at DC as an uphill battle. He also added that DOGE was being used as a scapegoat for the failure within the administration.

The billionaire's brief but turbulent tenure in Washington was marked by clashes with key White House officials, public criticism of Trump’s tax policies, and frustration with perceived inefficiencies.

Just recently, he criticised Trump's "Big Beautiful spending bill", claiming how the bill would increase the country's deficit and not just decrease it, hence undermining the work that DOGE had been doing.

Musk also previously described the federal government's internal inefficiencies as worse than what he had expected. But Musk's frustration was more than just domestic.

Musk also reportedly openly derided trade adviser Peter Navarro over tariffs and reportedly opposed an OpenAI-Abu Dhabi deal due to his own AI company’s exclusion. Behind the scenes, Musk’s relationships with cabinet members grew increasingly strained, culminating in a swift, senior-level decision for his departure.

Despite the controversies, DOGE has managed to shrink the federal civilian workforce by 12% through buyouts, early retirements and restructuring-a feat Musk frequently touted.

Musk Admits Spending Too Much Time On Politics

In a May 28 interview with Ars Technica, Musk also admitted that he had spent "a bit too much time" in politics, which some critics claim has impacted Tesla's performance.

"I think I probably did spend a bit too much time on politics."

However, he clarified that the time he spent on DOGE wasn't as significant as many believed, and he claimed media coverage for overrepresenting his involvement.

"It's not like I left the companies. It was just relative time allocation that probably was a little too high on the government side, and I've reduced that significantly in recent weeks."

In retrospect, many Tesla investors have already raised red flag and have warned Musk on multiple occasions to cut back on his political involvement and focus on leading the EV company, with major shareholders demanding he dedicate at least 40 hours a week to the company and implement stricter governance measures.

The backlash was fueled by a 71% drop in Tesla’s quarterly profits, a 49% plunge in European sales, and ongoing reputational damage linked to Musk’s political activities.

Days leading into his departure, Musk has pledged to significantly reduce his political contributions and remain Tesla’s CEO for at least five more years, aiming to restore investor confidence and stabilize the company’s trajectory.

Musk, who have spent nearly $300 million supporting Republican campaigns last year, revealed that he would be taking a break from political contributions. At a recent economic forum, he said

"I think I've done enough."