Tesla stock rebounded on Wednesday, erasing earlier declines following a report from Politico indicating that Elon Musk, the CEO of the company, would be reducing his involvement in the Trump administration in the coming weeks.

The electric carmaker's shares had initially fallen by up to 4% after reporting its weakest sales quarter in three years. As per Politico's Rachel Bade, President Trump has informed his close advisers, including Cabinet members, that Musk will be stepping back from his current role soon.

The news arrived just before Trump's scheduled press conference to unveil new tariff plans on what he termed "Liberation Day." A senior official mentioned that Musk might retain an informal advisory position at the White House. This development follows a call from some on Wall Street, such as Wedbush's Dan Ives, for Musk to refocus on Tesla, given the stock's significant decline from its 2024 high.

Tesla's first-quarter global deliveries significantly missed estimates, with the company reporting 336,681 deliveries compared to the Bloomberg consensus of 390,342. This marks Tesla's lowest delivery quarter since Q2 2022. The company attributed the production delay to the Model Y changeover but expressed satisfaction with the new Model Y's production ramp-up.

Tesla also announced it had produced 362,615 units worldwide in the first quarter and sold 10.4 GWh of energy storage products. The company is slated to disclose its Q1 earnings on April 22.

Tesla's sales have been sluggish in most global markets, with data showing decreased registrations in key European regions in March compared to the previous year. France, for instance, experienced a 36.8% drop in Tesla EV registrations, while Norway registered a 63.9% decline. Sweden saw a minor 1% decrease in registrations.