Elon Musk's Tesla admits "political sentiment" may hurt the company

Tesla acknowledged Tuesday that "political sentiment" may be undermining the company's financial performance and that tariffs are poised to do the same.Why it matters: Tesla CEO Elon Musk — the world's richest person — has become a close ally and outspoken adviser to President Trump, unleashing a backlash on the company.The automaker fell well short of expectations on earnings and sales in the first quarter amid growing signs that some customers are recoiling from the brand.First-quarter revenue totaled $19.3 billion, down 9% from a year earlier and short of S&P Capital IQ expectations of $21.3 billion.Net income was $409 million, down 71%.What they're saying: "Uncertainty in the automotive and energy markets continues to increase as rapidly evolving trade policy adversely impacts the global supply chain and cost structure of Tesla and our peers," the company said in an earnings presentation."This dynamic, along with changing political sentiment, could have a meaningful impact on demand for our products in the near-term."The company did not immediately address investor hopes that Musk will relinquish his role in Washington and refocus his efforts on Tesla.Threat level: "We view this as a fork in the road time: if Musk leaves the White House there will be permanent brand damage...but Tesla will have its most important asset and strategic thinker back as full time CEO to drive the vision and the long term story will not be altered," Wedbush Securities analyst and longtime Tesla bull Dan Ives wrote Sunday in a research note. "IF Musk chooses to stay with the Trump White House it could change the future of Tesla/brand damage will grow."Zoom in: Automotive revenue was down 20% to $14 billion, while energy generation and storage revenue rose 67% to $2.73 billion and services and other revenue increased 15% to $2.64 billion.The company said tariffs would hit its energy storage business harder than its automotive business."We are taking actions to stabilize the business in the medium to long-term and focus on maintaining its health," Tesla said in the presentation without providing specifics.Yes, but: Tesla's stock has always been tied closely to its future ambitions.Musk has said Tesla will launch a robotaxi business in 2025 and will begin production of its Optimus humanoid this year, as well.The impact: The company's stock was up slightly in after-hours trading at 4:45 p.m. It had shed over 14% over the past month heading into earnings.Go deeper: Elon Musk says he's taking a step back from DOGE after Tesla "blowback"

Tesla acknowledged Tuesday that "political sentiment" may be undermining the company's financial performance and that tariffs are poised to do the same.Why it matters: Tesla CEO Elon Musk — the world's richest person — has become a close ally and outspoken adviser to President Trump, unleashing a backlash on the company.The automaker fell well short of expectations on earnings and sales in the first quarter amid growing signs that some customers are recoiling from the brand.

First-quarter revenue totaled $19.3 billion, down 9% from a year earlier and short of S&P Capital IQ expectations of $21.3 billion.

Net income was $409 million, down 71%.What they're saying: "Uncertainty in the automotive and energy markets continues to increase as rapidly evolving trade policy adversely impacts the global supply chain and cost structure of Tesla and our peers," the company said in an earnings presentation."This dynamic, along with changing political sentiment, could have a meaningful impact on demand for our products in the near-term.

"The company did not immediately address investor hopes that Musk will relinquish his role in Washington and refocus his efforts on Tesla.Threat level: "We view this as a fork in the road time: if Musk leaves the White House there will be permanent brand damage..

.but Tesla will have its most important asset and strategic thinker back as full time CEO to drive the vision and the long term story will not be altered," Wedbush Securities analyst and longtime Tesla bull Dan Ives wrote Sunday in a research note. "IF Musk chooses to stay with the Trump White House it could change the future of Tesla/brand damage will grow.

"Zoom in: Automotive revenue was down 20% to $14 billion, while energy generation and storage revenue rose 67% to $2.73 billion and services and other revenue increased 15% to $2.64 billion.

The company said tariffs would hit its energy storage business harder than its automotive business."We are taking actions to stabilize the business in the medium to long-term and focus on maintaining its health," Tesla said in the presentation without providing specifics.Yes, but: Tesla's stock has always been tied closely to its future ambitions.

Musk has said Tesla will launch a robotaxi business in 2025 and will begin production of its Optimus humanoid this year, as well.The impact: The company's stock was up slightly in after-hours trading at 4:45 p.m.

It had shed over 14% over the past month heading into earnings.Go deeper: Elon Musk says he's taking a step back from DOGE after Tesla "blowback".