Tesla’s flailing sales figures have put the company closer to the red than it has been in years, according to financial results released Tuesday, threatening one of its biggest advantages over other EV players.
The electric automaker reported $409 million in net income on $19.3 billion in revenue after delivering almost 337,000 EVs in the first quarter of the year. The company’s net income reflects a 71% drop from the same quarter last year.
It was the worst quarter for Tesla deliveries in more than two years and came on the heels of the company’s first-ever year-to-year drop in sales. Tesla’s income was buffered by selling $595 million in zero-emissions tax credits, according to its earnings report — without those, it would have posted a loss.
And yet, Tesla stock rose in after-hours trading as investors put more weight on the company’s plans to begin production on an affordable EV in June and CEO Elon Musk’s comments during an earnings call that he would reduce his role with the Department of Government Efficiency to focus more attention on Tesla. Musk did not commit to ending his DOGE work altogether though, noting he may continue in some capacity through the remainder of President Donald Trump’s second term.
TechCrunch published a roundup of other Musk comments covering tariffs, robotaxis, AI, and EVs, during Tesla’s earnings call.
Tesla also cautioned shareholders about how the trade war may affect its business moving forward. The company said President Trump’s tariffs and “changing political sentiment” could have a “meaningful impact on demand for our products.”
The company noted the current tariffs, the bulk of which are directed at China, will have “a relatively larger impact on our Energy business compared to automotive.” Tesla said it is taking actions to stabilize the business in the medium to long term and focus on maintaining its health, but it also cautioned investors that it can’t say whether it will be able to grow sales this year.
Tesla is sticking to its ambitious (but mysterious) plans around making more affordable models, stating it remains on track for start of production of these vehicles in the first half of 2025. During the earnings call, Musk was more specific, stating production would begin in June.
These vehicles will use aspects of a next-generation platform that powers the robotaxi, but will rely on its existing one that powers the Model Y and Model 3, the company said in its shareholder’s letter. As such, these cheaper vehicles will be produced on the same manufacturing lines as the current vehicle lineup, the company said.
This flies in the face of a Reuters report from last week that claimed the first of these new EVs is delayed by months.
Tesla’s sales are up against a number of headwinds.
The company’s EV lineup is aging (though the sedans and SUVs have now all gotten face-lifts) and its newest product, the Cybertruck, is nowhere near the hit that CEO Elon Musk thought it could be. And Musk’s far-right politics, along with his involvement in the Trump administration, have created a sizable backlash to Tesla’s brand.
At the same time, Musk has oriented the company toward its Robotaxi and Optimus robot projects.
He has promised to launch an initial version of the Robotaxi service in Austin this June, with other cities potentially coming by the end of this year, but has been light on details about how it will work.
Musk has yet to demonstrate that Teslas are capable of driving themselves without human intervention despite years of making that promise. What’s more, The Information recently reported that an internal analysis done at Tesla showed the Robotaxi program would lose money for a long period of time even if it were to work.
At this time last year, Tesla was grappling with some gloomy numbers. In case you forgot, the company’s profits fell 55% to $1.13 billion in the first quarter of 2024 from the same period in 2023. Tesla said it was due to a protracted EV price-cutting strategy and “several unforeseen challenges” cut into the automaker’s bottom line.
Tesla tried to turn that profit ship around, but faced continued pressure. In Q2 of 2024, Tesla reported $1.5 billion in profit, down 45% from the same period in 2023. Profits were hit by a $622 million restructuring charge. Although it’s worth noting, that profit was padded by a record $890 million in regulatory credit sales.
This article originally published at 1:15 pm PT. It has since been updated with comments from Elon Musk and other executives from the earnings call.
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