Speculation is mounting that Elon Musk may soon step away from his position overseeing the Department of Government Efficiency (DOGE) on behalf of President Donald Trump, a move that would reshape both the Trump administration’s efficiency efforts and Musk’s business interests.
As Musk prepares for Tesla’s crucial Q1 earnings call on Tuesday, we examine who stands to gain (and lose) from his potential departure.
Tesla: Poised for a Reset?
Tesla appears to be the clearest potential beneficiary if Musk returns full-time. The electric vehicle maker has faced significant challenges in 2025, with its stock down 40% year-to-date and first-quarter sales falling short of expectations.
“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 Sunday, describing Tesla’s situation as “code-red” if Musk maintains his government role.
Some Tesla shareholders are directly raising the issue ahead of Tuesday’s earnings call, with one retail investor asking: “Is the Tesla board discussing whether their CEO should focus fully on Tesla and leave government to elected politicians?”
While Tesla may face “permanent brand damage” from Musk’s political role, according to Ives, the analyst believes “the long term story will not be altered” if Musk exits government service. Tesla investors appear eager for clarity on the company’s long-rumored affordable electric vehicle and upcoming robotaxi launch, both key initiatives that could benefit from Musk’s undivided attention.
Government Contractors: A Reprieve?
Several government and military technology contractors may emerge as winners if Musk steps away. William Blair analyst Louie DiPalma identified Booz Allen Hamilton, CACI International, and Palantir Technologies as companies that “may stand to benefit” from Musk’s departure.
The impact of DOGE’s efficiency efforts on government contractors has been the subject of competing narratives. Defense Secretary Pete Hegseth announced the cancellation of “wasteful” contracts with consulting firms including Accenture, Deloitte, and Booz Allen, reportedly saving $4 billion. However, DiPalma noted that William Blair has “not observed any material contract cancellations” despite a “major push” to shift contracts to a fixed-price structure.
Goldman Sachs recently downgraded Booz Allen Hamilton, citing data suggesting the company was bearing a “disproportionate share of contract cuts.” Other analysts, however, remain optimistic about the sector. Truist analyst Tobey Summer maintained buy ratings on both CACI and Booz Allen, suggesting the group could become “more investable” once there’s greater clarity on contract revisions.
Federal Workforce: Uncertain Outlook
Under Musk’s leadership, DOGE announced over 250,000 federal job cuts in March, described as “the highest single-month total since 2009.”
Whether this aggressive pace of workforce reduction would continue without Musk remains unclear.
Even if Musk leaves, the administration’s efficiency agenda would likely continue. Musk himself reportedly believes his departure wouldn’t “diminish the [department’s] power or work,” according to a Washington Post report.
The Trump Administration: Losing a High-Profile Asset
The administration would lose a significant public figure who brought tech industry credibility to government efficiency efforts. Musk’s involvement attracted substantial attention to the DOGE initiative, though that visibility has been double-edged.
Predictably, the mainstream media has launched an all-out attack on Musk’s character, and it has worked to some degree.
Polling by analyst Nate Silver found Musk’s unfavorability at 53%, with about 40% viewing him favorably. According to Silver, Musk’s net favorability has remained steady since late March, possibly “because he’s scaled back the public-facing part of his role in the Trump administration as he prepares to exit government later this year.”
Musk: Personal and Professional Considerations
Musk’s decision appears to involve both practical and personal considerations. As a “special government employee,” his service has a 130-day limit that will expire in May.
The Washington Post reported that Musk is “tired of fielding what he views as a slew of nasty and unethical attacks from the political left” and the media’s toll is a factor in his decision. Reports of terror attacks and vandalism at Tesla facilities underscore the frenzied reaction to his role in slashing federal spending.
As Tesla’s crucial earnings call approaches, market observers will be watching closely for any indication of Musk’s plans.