Tesla has released its first-quarter earnings — and the numbers are even more brutal than we expected.
The embattled carmaker missed analysts’ expectations by a mile, reporting that its net income had slid an astonishing 71 percent since the first quarter of last year.
The company’s total revenue is down nine percent compared to the same period last year. Its car business in particular has felt the pain, with revenue falling 20 percent as buyers increasingly look elsewhere in the face of constant controversy.
The key figure responsible for the trouble is the company’s CEO Elon Musk, who has been widely criticized for dragging the EV maker’s brand through the mud with his extremist views and disastrous slashing of government budgets with the help of his so-called Department of Government Efficiency after contributing hundreds of millions of dollars to Donald Trump’s reelection efforts.
Growing anti-Musk sentiment has spawned an entire “Tesla Takedown” movement, with countless protesters showing up at showrooms across the country.
Sales have fallen off a cliff across the globe, with longtime Tesla bull and Wedbush Securities analyst Dan Ives warning that Musk had created a “code red” situation for the company.
Earlier this month, Tesla revealed that the number of vehicles it delivered dropped by 13 percent in the first quarter of this year over the same period last year.
Investors have voiced concerns over the mercurial CEO abandoning his carmaker in favor of gutting government agencies.
“Musk needs to leave the government, take a major step back on DOGE, and get back to being CEO of Tesla full-time,” Ives argued in a Sunday note to clients. “Tesla is Musk and Musk is Tesla… and anyone that thinks the brand damage Musk has inflicted is not a real thing, spend some time speaking to car buyers in the US, Europe, and Asia.”
Complicating matters even further is Trump’s trade war. A 25 percent tariff on auto imports could prove disastrous for Tesla. As the Wall Street Journal reports, Tesla relies on affected countries, including Mexico, for its auto parts.
In a shareholder deck, Tesla confirmed that the trade war was hurting it. The company warned investors that “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.”
One area where it is making modest revenue: carbon credits it receives from other automakers, who paid it $595 million to offset the CO2 pollution from their gas vehicles.
In short, Tesla is in a bad state right now. Its share price is down well over 50 percent since hitting an all-time high shortly after Trump was elected late last year.
And the company isn’t promising smoother waters ahead this year, writing only that it will “revisit our 2025 guidance in our Q2 update.”
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