Tesla’s latest financial report reveals the company is facing growing financial pressure, with profits slipping closer to losses than they’ve been in years. On Tuesday, Tesla announced $409 million in net income from $19.3 billion in revenue, after delivering nearly 337,000 electric vehicles in the first quarter of the year.
This marks a steep 71% drop in profit compared to the same quarter last year. It was also the company’s weakest delivery quarter in more than two years and followed Tesla’s first-ever year-over-year sales decline. Notably, Tesla’s earnings included $595 million from selling zero-emissions tax credits, without that boost, the company would have reported a loss.
Tesla warned investors about ongoing risks, including the effects of trade tensions and shifting political dynamics. The company highlighted that tariffs, especially those targeting China, will hit its energy division harder than its car business. Tesla said it’s taking steps to stabilize operations and focus on long-term sustainability, but admitted it can’t guarantee sales growth this year.
Looking ahead, Tesla reiterated its plans to introduce more affordable models, aiming to start production in the first half of 2025. These vehicles will partially use new next-generation technology alongside the current platforms that power the Model Y and Model 3. They’ll be built on the same production lines as existing models. This contradicts a recent Reuters report claiming delays in the new vehicle launch.
Tesla’s challenges extend beyond numbers. Its vehicle lineup is aging despite recent updates, and its newest model, the Cybertruck, hasn’t met expectations. At the same time, CEO Elon Musk’s political views and ties to the Trump administration have sparked backlash, affecting the company’s brand image.
Musk has shifted focus toward future projects like the Robotaxi and Optimus robot. He has promised to debut the Robotaxi service in Austin this June, with other cities to follow by year’s end. However, key details remain unclear. Despite years of promises, Tesla has yet to prove its cars can safely drive themselves without human control. A recent report from The Information revealed that Tesla’s internal analysis predicts the Robotaxi project would lose money for an extended period, even if it launches successfully.
This time last year, Tesla was already dealing with falling profits. In the first quarter of 2024, profits dropped 55% to $1.13 billion from the year before, largely due to aggressive EV price cuts and unexpected challenges. Although Tesla aimed to recover, it continued to face difficulties. In the second quarter of 2024, profits fell again, down 45% to $1.5 billion, hit by a $622 million restructuring charge. That quarter’s results were also propped up by a record $890 million from regulatory credit sales.
