Tesla’s (NASDAQ: TSLA) Q1 2025 earnings show just how reliant the company has become on government support to stay in the black.
The electric vehicle maker reported $595 million in revenue from the sale of regulatory credits — more than its total net income of $420 million for the quarter. That means Tesla would have posted a net loss without the subsidies.
Regulatory credits are payments Tesla receives from automakers who need help meeting emissions targets. The company has long relied on this stream of income to boost profitability, but the trend is becoming more striking as core auto margins shrink.
Analysts had already braced for weak results after Tesla’s Q1 deliveries fell short of expectations. But the growing gap between credit sales and core earnings is renewing questions about the sustainability of Tesla’s profit model — especially in an increasingly competitive EV market.
Tesla’s Q1 revenue came in at $19.34 billion, down from $23.33 billion a year ago, and missed Wall Street expectations by nearly $2 billion.
Globely News covers the game changers transforming the worlds of business, sports, politics, and technology. From AI and electric vehicles to the rise of China and the NFL's next stars, we've got you covered.