Tesla’s (NASDAQ: TSLA) Q1 2025 earnings are now out. The embattled electric vehicle company reported $19.34 billion in revenue and earnings per share of $0.27 in Q1, falling short of Wall Street expectations. Analysts had forecast EPS of $0.39 and revenue of $21.11 billion.
With Q1 deliveries at 336,681, falling well short of analyst expectations — it was Tesla’s lowest quarterly delivery total since Q2 2022 — analysts had already trimmed their revenue forecasts.
As total revenue decreased 9% year-on-year, automobile revenue for the company plunged by 20%.
Tesla Q1 2025 Highlights
Tesla reported a 66% year-over-year decline in operating income for the first quarter of 2025, falling to $0.4 billion and resulting in an operating margin of 2.1%.
The drop was driven by reduced average selling prices, a decline in vehicle deliveries, and increased operating expenses tied to artificial intelligence and other R&D projects — partially offset by lower selling, general, and administrative (SG&A) costs.
The company noted several positive offsets, including growth in gross profit from its Energy Generation and Storage division, lower costs related to the Cybertruck production ramp in Q1 2024, and a reduction in vehicle production costs due to cheaper raw materials.
But Tesla also cited lower fixed cost absorption tied to a year-over-year decline in Model Y output.
Subsidies are increasingly critical for Tesla. The company would have posted a net loss without them. Revenue from regulatory credits ($595 million) increased year-over-year, not simply padding its bottom line, but also exceeding its net income ($420 million).
Analyst Reactions
“This quarter was a disaster,” Wedbush Securities analyst Dan Ives said on CNBC after the earnings release.
Musk, he warned, would need to re-commit to running Tesla full-time to salvage the company, otherwise, the company will “become an avalanche you can’t control.” Ives is a prominent Tesla bull.
Robotaxi and Optimus Update
Tesla’s future also rests on its transition toward AI-powered autonomy and robotics — a shift the company says is progressing on schedule.
It claims that it remains on track for a pilot launch of its Cybercab robotaxi service in Austin by June, and plans to begin building Optimus humanoid robots at its Fremont pilot production line later in 2025, with broader deployment expected across its factories.
Tesla claims its future Robotaxi will follow a “revolutionary unboxed manufacturing strategy” and is scheduled to enter volume production in 2026.
Tesla Supply Chain Risks and Forward Guidance
Tesla said it has made progress in strengthening its domestic supply chain and mitigating geopolitical risk, noting that it has launched an IRA-compliant 4680 battery cell, making the Cybertruck eligible for the $7,500 federal EV tax credit.
The company emphasized that all components of its 4680 cell are now sourced from at least two different countries to reduce supply risk.
Additionally, its lithium refining and cathode production facilities remain on track to begin production in 2025, furthering its effort to onshore key battery material manufacturing in the United States.
Model 3 and Model Y deliveries in the U.S. are now being made with 100% U.S.-built battery packs, Tesla said. But the company acknowledged the uncertainty posed by shifting global trade policies, which could impact both its automotive and energy supply chains, overall cost structure, and consumer demand for durable goods.
“While we are making prudent investments that will set up both our vehicle and energy businesses for growth, the rate of growth this year will depend on a variety of factors, including the rate of acceleration of our autonomy efforts, production ramp at our factories, and the broader macroeconomic environment,” Tesla said.
Notably, the company said that it would revisit its 2025 guidance in its Q2 update.
Tesla (TSLA) Stock: A Strong Pre-Earnings Run on Tuesday
Tesla stock closed at $237.97, surging by nearly 5% on Tuesday as the major averages closed up 2.5%. That upward momentum continued briefly in after-hours trading, but the stock has since leveled off.
The company will hold its earnings call at 5:30 PM Eastern.
This is a breaking news story and will be updated as more information becomes available.
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