Tesla Q1 2025 profit report: Elon Musk addresses huge losses

The global Tesla bloodbath has continued after Elon Musk’s company reported a staggering drop in profits.

The global Tesla bloodbath has continued after Elon Musk’s company reported a huge 71 per cent drop in first quarter profits compared to the same time last year.

The automaker reported first-quarter revenue of $19.3 billion and earnings per share of just $0.27 on Tuesday, both well below Wall Street expectations of $21.3 billion in revenue and $0.41 EPS.

Tesla’s core business plunged 20 per cent year-on-year to $14 billion, making its weakest performance since 2021.

Net income slid 71 per cent to $409 million compared to $1.39 billion a year earlier.

The company was only able to pull $400 million in operating profits thanks to $595 million in regulatory credits, essentially free income earned from gas-powered rivals paying Tesla to comply with emission rules.

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Elon Musk says he will refocus on Tesla in the wake of the profits slide. Picture: AFP

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Tesla delivered just 336,681 vehicles for the quarter, a 13 per cent drop from the previous year and far lower than the 390,000 expected.

It was Tesla’s worst revenue performance since Q2 2022 and its least profitable quarter since Q1 2021.

The stiff drop compared to 12 months ago comes off the back of declining sales as a result of fierce EV competition out of China as well as severe political backlash against Mr Musk both in the US and abroad.

Powerhouse Chinese brands like BYD have swamped Tesla in a number of markets, including Australia, by offering cheaper EV alternatives with just as many tech upgrades.

Mr Musk used the results to announce he would be spending more time focused on the Tesla brand in coming weeks.

“Starting early next month, in May, my time allocation to DOGE [Department of Government Efficiency] will drop significantly,” Mr Musk said on a call to investors.

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Mr Musk said he would be dropping his DOGE responsibilities entirely but a couple of days a week would allow him to be “allocating far more of my time” to Tesla.

Tesla maintained reasons for the decline lay in the need to update production lines at its vehicle factories in preparation for the new Model Y SUV.

The company also indicated lower selling prices to meet competition and additional sales incentives negatively impacted revenue and profit.

eToro market analyst Josh Gilbert said it’s been a “rollercoaster” 2025 for Tesla.

“Shares are down 44 per cent year to date, making it the worst-performing Magnificent Seven stock,” he said.

Analysts are pointing to Mr Musk’s controversial involvement in the Trump administration, where he currently serves as “special government employee” in the DOGE.

“Musk’s involvement with DOGE, advising the Trump administration, is a double-edged sword,” Mr Gilbert said.

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A person smashes a Tesla car during anti-Elon Musk protest. Picture: AFP

“Some investors hope his ties to Trump could protect Tesla from the worst tariffs, but this risks alienating Chinese consumers, who drove over 20 per cent of Tesla’s 2024 revenue in the world’s largest EV market.”

The company’s stock has plunged nearly 50 per cent from its recent highs and the backlash is beyond financial.

Tesla showrooms have faced protests and vandalism incidents have been occurring across the world.

“Investors have started to lose patience with the EV giant due to poor vehicle deliveries, auto tariffs and visionary CEO, Elon Musk, taking his eye off the ball from Twitter to SpaceX to DOGE,” Mr Gilbert said.

Elon Musk has faced growing backlash for his work with DOGE. Picture: AFP

Mr Musk is expected to leave his White House post on May 30, once the 130-day maximum for special government employees expires.

Whether or not he chooses to return to Tesla full-time will determine the company’s future.

“If Musk leaves the White House there will be permanent brand damage,” Wedbush Securities wrote in a research note, “but Tesla will have its most important asset and strategic thinker back full-time CEO … if Musk chooses to stay, it could change the future of Tesla – and brand damage will grow.”

Investors are demanding clarity on several key issues, including the impact of newly imposed 25 per cent US auto tariffs, the rollout of promised low-cost EV models and the timeline for Tesla’s full-self driving and Robotaxi programs.

“Ultimately, Musk needs to deliver some magic and step up to the plate. He’s done it many times before, but this feels like a crucial moment for Tesla,” Mr Gilbert said.