• Without providing any evidence, Tesla CEO Elon Musk alleged the protests plaguing Tesla showrooms in the U.S. and Europe are due to the Department of Government Efficiency (DOGE) eliminating financial fraud and not, as protestors have stated, due to his unelected high-profile role in government. He also claimed the protestors are getting paid for demonstrating against the electric vehicle maker, a point he has speculated on in the past.   

Tesla CEO Elon Musk attempted to point the finger at protestors who have demonstrated en masse in front of vehicle showrooms in the U.S. and Europe, claiming without evidence that they have been activated because they are the recipients of government waste and fraud. Musk told analysts during the company’s first quarter earnings call on Tuesday that the demonstrators would never admit the real reason they’re protesting is because they get paid through government programs that have been victim to DOGE’s cuts, but that was the real rationale underlying their actions.

“The actual reason is because those receiving the waste and fraud wish to continue receiving it; that is the real thing that’s going on here, obviously,” Musk told analysts during an earnings call on Tuesday. “The protests that you’ll see out there, they’re very organized. They’re paid for that.”

Musk previously accused wealthy Democratic political opponents of funding protestors.

The “Tesla Takedown” protests, as some have been called, have urged Tesla stockholders to sell their shares and Tesla owners to dump their cars. The organizers have described the movement as peaceful and have said they oppose violence, vandalism, and destruction of property. 

“Elon Musk is destroying democracy around the world, and he’s using the fortune he built at Tesla to do it,” the protest description on organizing website Action Network states. “We are taking action at Tesla to stop Musk’s illegal coup.”

Some demonstrators have grown violent, lobbing molotov cocktails and burning Teslas, prompting President Donald Trump to announce that anti-Musk actions against the automotive manufacturer would be treated as “domestic terrorism.” Last month, police arrested a 36-year-old Nevada man and charged him with 15 felony counts for vandalising a Tesla collision center in Las Vegas and firebombing five cars. Attorney General Pamela Bondi also announced charges against three other people in Colorado, South Carolina, and Oregon who also used molotov cocktails to either light Teslas on fire or attempt to do so, as well as charging stations.  

In an interview with Fox News in March, Musk blamed Democrats for the protests and called their actions “deranged.”

Protest organizers in Seattle did not immediately respond to a request for comment.  

Tesla Stock Tumbles

Musk’s take on the Tesla protests comes as Tesla faces a serious reckoning on its stock price. Share prices are down 37% year-to-date and even longtime Tesla bulls have called “code red” on Musk’s time at Trump’s side and his work with DOGE.

“Musk needs to leave the government, take a major step back on DOGE, and get back to being CEO of Tesla full-time,” Wedbush Securities analyst Dan Ives wrote in a note last week. “Tesla is Musk and Musk is Tesla….and anyone that thinks the brand damage Musk has inflicted is not a real thing….spend some time speaking to car buyers in the US, Europe, and Asia…you will think differently after those discussions.”

Tesla’s profit has taken a significant slide and the first quarter was more of the same. Operating income tumbled 66% year-over-year to $399 million, compared to $1.71 billion in the first quarter last year. Net income dropped 71% year-over-year to $409 million compared to $1.39 billion, and operating margin decreased to 2.1% from 5.5%—a slide of 343 basis points. 

Meanwhile, revenues were down 9% to $19 billion compared to $21.3 billion, and the main culprits were lower vehicle deliveries, lower average car selling prices, and negative foreign exchange impact. 

There were a few positives, however. Energy revenues were up 67% to $2.73 billion and services revenue grew 15% to $2.64 billion. Tesla also had a cash position of about $37 billion, up 38% year over year.

Tesla has said the performance headwinds are due to production issues with the Model Y update, lower selling prices, and rising operating expenses because of AI and other projects. However, investors are clearly deeply concerned that Musk is squandering Tesla’s future because of his involvement with the Department of Government Efficiency (DOGE) and his high-profile presence in the Trump administration. 

This story was originally featured on Fortune.com

Even the perennially bullish crowd of analysts covering Tesla warned of sorely disappointing results in Q1, a view signaled by the poor deliveries for the quarter reported in early April.

But the numbers released after the market close on April 22 were much, much worse than expected. Automotive sales tumbled 20% over the same period last year to $14 billion. Despite a strong 12-month gain in its industrial and residential battery storage franchise, overall revenues plunged 9%. Falling sales hammered profitability, sending net income down nearly 40% to a piddling $409 million, far below the over $600 million forecast by Wall Street.

Following the bad, but not-nearly-as-bad Q4 report, this writer introduced a new concept for measuring Tesla’s repeatable, bedrock earnings generated by its current businesses––almost exclusively comprising cars and batteries, plus a small services unit. To get there, I eliminated such one-time gains as a big tax benefit in the final quarter of 2023, and a non-cash profit on the $600 million write-up of its Bitcoin holdings in Q4. I also eliminated earnings from the sale of regulatory credits to competing carmakers, a benefit that Musk himself says will prove ephemeral. 

What we’ll call these hardcore profits show how much of Tesla’s gigantic–currently $812 billion–market cap is justified by what it’s doing now, though its present business is declining, and how much owes to Musk promises for full self-driving vehicles and software and robotaxis. So far, those assurances have proven a constantly receding horizon.

In the past quarter, Tesla lost money on “hardcore” businesses

To get to that number, I started with net earnings of $409 million, and subtracted its after-tax profit from the sale of reg credits. That figure is $433 million, and accounts for over 100% of Tesla’s total profits. For the past four quarters, Tesla’s posted a “hardcore,” hopefully “repeatable” number of $3.5 billion. Hence, it’s now selling at an adjusted P/E of over 230 (the $812 billion valuation divided by my profit number of $3.5 billion.) By the way, at its peak in 2022, Tesla’s “hardcore number” for the year was almost $12 billion, over three times what it achieved in the past 12 months. 

Let’s give the car-battery business a P/E of 20, twice the global industry average, just to be generous. That puts the worth of its currently-up-and-running operations at $70 billion. The entire difference of $742 billion is essentially a blind vote of confidence that Musk will deliver years of earnings growth from here seldom witnessed in the annals of capitalism and never achieved by a player of Tesla’s age and size.

If you want a 10% return from here, Tesla stock price would need to double from today’s $235 to $470 in seven years. Of course, Musk’s machine got there just a couple of months ago. But the future looks a lot dimmer now than it did in the heady days following Trump’s election. Hitting the worth means Tesla’s market cap must also double, to over $1.6 trillion. At a, once again, generous forecast of a 30 P/E, the net earnings required are well over $50 billion. Cars won’t do it. Tesla would need to earn half of what Apple generates now on franchises that today remain the realm of gauzy assurances.

It looks like Musk once again is fogging investors’ minds

The Tesla Q1 press release blamed the miserable performance on “uncertainty in the automotive and energy markets [that] continues to increase as rapidly evolving trade policy adversely impacts global supply chain and cost structure of Tesla and our peers.” In other words, Tesla’s blaming Musk’s boss in the White House. But in the minds of Tesla fans, Musk once again saved the day. The Q1 statement announced the EV giant would indeed launch the long-awaited, affordable, apparently all-new Model Y by mid-2025, and introduce a fleet of robotaxis in its hometown of Austin, Texas in 2026.

The market’s cheering, at least for now. In after-hours trading on April 22, Tesla gained 3.5% following a 4.6% jump during the day. In the movie musical “The Music Man,” slick salesman Henry Hill charmed the good townspeople in the mythical city of River City into paying up for carloads of trombones and clarinets that were always just about to arrive. Hill’s wordplay instilled visions of a great marching band that intoxicated his audience.

The Music Man’s got nothing on Elon Musk. 

This story was originally featured on Fortune.com

• Despite early White House signals suggesting a trade deal with Japan was imminent, negotiations in Washington, D.C., ended without an agreement, highlighting Japan’s ongoing concerns and reluctance to concede ahead of domestic elections. Conflicting messages from U.S. officials and resistance from global partners like China suggest bilateral trade talks will be protracted, casting doubt on President Trump’s ambitious “90 deals in 90 days” goal.

During the weeks leading up to a visit from Japan’s chief trade negotiator, the White House dropped hints it was closing in on a deal.

Indeed, speculation was rife that the visitor from Tokyo might even secure the “first mover” advantage touted by Treasury Secretary Scott Bessent: winning advantageous terms as the country quickest to agree to a deal with the Trump administration.

And yet Ryosei Akazawa, Japan‘s economic revitalization minister, has gone home without an agreement in place—telling local media he had urged the Americans to reconsider their “extremely regrettable” action.

Moreover, Japan’s prime minister said only yesterday he still has “grave concerns” about some of the policies announced by the Oval Office.

Additionally, when Bessent meets with Japanese Finance Minister Katsunobu Kato in Washington, D.C., this week, the topic of boosting the yen is set to come up for discussion. The request is likely to be denied, sources told Reuters.

At odds with White House message

Such resistance from Tokyo is at odds with the message coming out of the White House, with President Trump saying “big progress” has been made in talks with Japan.

Likewise Commerce Secretary Howard Lutnick said Trump was “totally in the driver’s seat” when it came to tariff negotiations, and that meetings with more than 75 countries trying to cut a deal were “back to back.”

The conflicting messages are leading analysts to wonder how realistic Trump’s “90 deals in 90 days” pledge will prove to be.

Investors are losing confidence in the U.S. dollar this week precisely because of this fear, wrote Thierry Wizman and Gareth Berry, rates strategists at Macquarie, in a note seen by Fortune.

“Many observers, including ourselves, had pointed to Japan as an early test case for an early deal,” the duo said. “And yet, the bilateral negotiations between the U.S. and Japan ended without the contours of a deal in place late last week. 

“It is not clear which issues remain as stumbling blocks—it could be the U.S.’s demands for access to Japan’s agricultural markets, [Japanese yen] revaluation, higher military spending in Japan, or purchases of U.S. LNG [liquefied natural gas], etc.”

A long and drawn out process

And while America, the world’s largest economy, might be squeezing its allies toward a deal, there are other pressures shaping the global response to Trump’s administration.

Notably, China warned yesterday that any countries working against its interests would be punished.

The U.S. is doing precisely that, having ramped up a series of tariffs on China to the point of a 145% hike on imports from the nation. To sign a deal with the U.S., therefore, could put any nation at the mercy of retaliation from Beijing.

“China firmly opposes any party reaching a deal at the expense of China’s interests,” a Chinese Commerce Ministry spokesperson said yesterday. “If this happens, China will never accept it and will resolutely take countermeasures.”

Likewise the Macquarie analysts cite internal pressures on political leaders as a reason not to sign on the dotted line.

“What’s made matters worse is that Japan’s prime minister … is facing upper house elections on July 20 (notably, after the end of the 90-day tariff reprieve). That may be forcing him to avoid seeming conciliatory to the U.S., until the elections are over,” the analysts added.

“In any case, the events surrounding the U.S.-Japan negotiations late last week suggest that there will be at the very least a lengthy period of bilateral negotiations between the U.S. and all of its bilateral partners that may stretch into July, extending the uncertainty about the sides’ willingness to make bilateral concessions.”

Investors might have been naively optimistic that the behemoth work needed to reach a deal would happen almost overnight. Now, Berry and Wizman say, markets may be wiser to settle in for the long haul: “The U.S.’s trading partners may try to run the clock out on Trump, thinking that concessions from the U.S. will be easier to come by as a U.S. slowdown deepens. The process, we expect, will be long and drawn out.”

This story was originally featured on Fortune.com