Tesla reported a significant 71% drop in first-quarter net income on Tuesday, April 22, missing revenue expectations and raising new concerns about the company’s financial outlook. The electric vehicle maker’s total revenue for Q1 2025 fell 9.4% year-over-year to $21.3 billion, which was approximately $1.8 billion short of Wall Street forecasts. Tesla’s net income also dropped sharply to $409 million, down from $1.39 billion in the same period last year.
The company’s flagship models, the Model 3 and Model Y, saw deliveries decline by 16% compared to the previous year, while the “other models” category, which includes the highly anticipated Cybertruck, experienced an even steeper drop of 24%.
Despite the challenging results, one of the few bright spots for Tesla was its regulatory credits, which brought in $595 million. Without these credits, the company would have reported a loss, according to industry publication Electrek.
In an investor letter, Tesla attributed part of its financial downturn to global political and economic uncertainty, pointing to trade policy changes and political challenges that have impacted supply chains and cost structures. “Uncertainty in the automotive and energy markets continues to increase as rapidly evolving trade policy adversely impacts the global supply chain and cost structure,” the company wrote.
CEO Elon Musk, who has faced criticism for his political activities and connections to the Trump administration, indicated that he would reduce his involvement with DOGE to focus more on Tesla. In a call with investors, Musk sought to reassure them, stating, “We are not on the ragged edge of death,” and noted that Q1 is typically slower due to weather-related shopping patterns.
Tesla’s shares rose 5% in after-hours trading, continuing a trend of volatility that analysts suggest has become detached from the company’s core financial performance.
