Tesla’s First-Quarter Profits Tumble 71 Percent

The electric vehicle maker warns of ‘uncertainty’ in the global economy.

A Tesla Cybertruck is displayed at a Tesla dealership in Corte Madera, Calif., on Dec. 20, 2024. Justin Sullivan/Getty Images

Shares of Tesla Motors were little changed in extended trading after the electric vehicle maker’s first-quarter earnings report fell short of Wall Street estimates.

Total revenues fell by 9 percent to $19.34 billion from $21.3 billion a year earlier, and automotive revenues plunged 20 percent to $14 billion from $17.4 billion last year.

Earnings per share were 27 cents in the first three months of 2025, while profits declined by 71 percent to $409 million, from $1.39 billion.

Tesla was expected to report revenues of $21.24 billion and earnings per share of 43 cents in the January to March quarter, according to analysts polled by FactSet.

The company said in the first-quarter earnings report that uncertainty in the global economy could harm demand in the short term.

“Uncertainty in the automotive and energy markets continues to increase as rapidly evolving trade policy adversely impacts the global supply chain and cost structure of Tesla and our peers,” Tesla stated. “This dynamic, along with changing political sentiment, could have a meaningful impact on demand for our products in the near-term.”

“Uncertainty in the automotive and energy markets continues to increase as rapidly evolving trade policy adversely impacts the global supply chain and cost structure of Tesla and our peers,” Tesla stated. “This dynamic, along with changing political sentiment, could have a meaningful impact on demand for our products in the near-term.”

Tesla believes that its localized manufacturing base provides the company “advantages in delivering the best products” at competitive prices.

“We continue to make critical, high-value investments while maintaining a strong balance sheet during this uncertain period,” the quarterly update deck stated.

Tesla stock dipped as much as 0.5 percent in after-hours trading. Shares of Tesla have dropped about 37 percent this year, sliding below $238.

Rough Start to 2025

It has been a challenging beginning to the year for the company.

The company’s main headline driver has been the anti-Musk backlash in the political arena. Across North America and Europe, individuals have staged demonstrations at Tesla showrooms, protesting the Trump administration’s policy changes.

Over the last several weeks, the situation has escalated as vehicles have been defaced, dealerships attacked, and Tesla chargers destroyed by arson fires.

Last month, during an All-Hands meeting broadcast on social media platform X, Musk called the vandals’ actions “unreasonable.”

“This is psycho. Stop being psycho!” he said.

“If you read the news, it feels like, you know, Armageddon. It’s like, I can’t walk past the TV without seeing a Tesla on fire. Like, what’s going on? Some people, it’s like, listen, I understand if you don’t want to buy our product, but you don’t have to burn it down. That’s a bit unreasonable.”

In an earnings call with shareholders and analysts, Musk confirmed that he will spend less time at the Department of Government Efficiency next month as the major work has been completed.

Jeffrey Kleintop, chief global investment strategist at Charles Schwab, says shareholders want to know how Musk’s political investment affects sales.

Other factors have also been weighing on the once high-flying company’s prospects.

One aspect has been weakening demand. Tesla sales declined 13 percent in the first three months of 2025, reporting deliveries of 336,681 globally. By comparison, the electric vehicle maker delivered 387,000 cars a year ago.

Tesla blamed the sales decrease on a temporary production halt at its facilities while it upgraded lines to begin making a newer version of its Model Y electric SUVs.

Data from the European Automobile Manufacturers ‘ Association, meanwhile, shows that European sales dropped 49 percent in the first two months of 2025.

Market watchers expect the trend to persist this year.

Dan Ives, a tech analyst at Wedbush, has called it a “fork in the road moment” for Musk and Tesla.

“We knew 1Q Tesla deliveries would be soft but these numbers were bad. We are not going to look at these numbers with rose colored glasses … they were a disaster on every metric,” Ives said in an April 2 post on X.

The consensus forecast among Wall Street analysts is that Tesla enjoys a 22 percent stock price upside over the next 12 months. At the same time, analysts have lowered their targets for the upcoming year.

Like other companies, Tesla is in the crosshairs of President Donald Trump’s tariffs.

“Tesla finds itself in the company of a host of multinational firms expected to provide export color amid a deteriorating trade situation,” said Kleintop in a note.

The EV giant has expressed concern surrounding the administration’s trade policy adjustments.

As the most American-made vehicle on the market, Tesla is less affected by tariffs than its industry rivals. However, the company is not untouched by higher import duties, Musk said in an X post in March.

The automaker still sources car parts from foreign markets, including Canada, China, and Mexico.

“To be clear, this will affect the price of parts in Tesla cars that come from other countries. The cost impact is not trivial,” Musk said. “Important to note that Tesla is NOT unscathed here. The tariff impact on Tesla is still significant.”