Tesla Q1 earnings fall short as car sales slide 20%

Tesla reported weaker-than-expected results for the first quarter of 2025. The company earned 27 cents per share, below the expected 39 cents. Revenue fell to $19.34 billion, missing the $21.11 billion estimate. 

Automotive revenue dropped 20% from last year to $14 billion. Net income plunged 71% to $409 million as Tesla spent money upgrading its factories to build a new version of the Model Y SUV.

The company cited rising trade tensions, evolving political sentiment, and increased tariffs as risks to demand and supply chains. Tesla’s stock has been down 41% so far this year and has had its worst quarter since 2022.

Operating income fell 66% to $400 million, while operating margin shrank to 2.1%. Tesla leaned on $595 million in environmental credits to stay profitable in auto sales.

However, energy storage revenue surged 67% to $2.73 billion, helped by AI-driven grid demand. Tesla still plans to launch its robotaxi pilot in Austin by June.

Meanwhile, CEO Elon Musk said he will step back from the US DOGE Service next month to focus on Tesla.

Investors blame Musk’s political ties and rising Chinese EV competition for Tesla’s turmoil.