According to financial results released Tuesday, Tesla’s fiery sales are closer to red than they have in years, according to financial results that threaten one of its biggest advantages over other EV players.
The electric vehicle manufacturer reported net profit of $409 million with revenue of $19.3 billion after delivering around 337,000 EVs in the first quarter of the year.
The company’s net profit reflects a 71% decline from the same period last year. This was the worst quarter for Tesla delivery in over two years, coming just after the company’s first decline in sales each year. Tesla’s revenue was eased by selling a $595 million zero emissions tax credit, according to the revenue report.
Tesla also warned shareholders of how the trade war will affect businesses moving forward. The company said President Trump’s tariffs and “changes in political sentiment” could have “a meaningful impact on demand for our products.”
The company said current tariffs directed against China “have a relatively large impact on the energy business compared to automobiles.” Tesla said it is taking action to stabilize its business from the medium to long term and focus on maintaining health, but warned investors could not tell whether it could grow sales this year.
Tesla is sticking to an ambitious (but mystical) plan for creating more affordable models, which it says is on track for the start of production for these vehicles in the first half of 2025. These vehicles use the aspects of the next generation platform that drives the Robotakshi. So, these inexpensive vehicles will be produced on the same production line as their current vehicle lineup, the company said.
This is facing a Reuters report last week that claimed that the first of these new EVs were months behind.
Tesla sales are rising against many headwinds.
The company’s EV lineup is aging (although all sedans and SUVs have acquired facelifts), and its latest product, CyberTruck, is not near the hit that CEO Elon Musk thought was. And Musk’s far-right politics, along with his involvement in the Trump administration, created a considerable backlash against the Tesla brand.
At the same time, Musk is company-oriented with the Robotaxi and Optimus Robot projects.
He has pledged to launch an early version of the Robotaxi service in Austin this June.
Musk has yet to demonstrate that Teslas can drive himself without human intervention despite his long-standing promise. Additionally, the information recently reported an internal analysis conducted at Tesla that showed that even if the Robotaxi program works, you will lose money for a long time.
At this point last year, Tesla was working on some gloomy numbers. If forgotten, the company’s profits fell 55% from the first quarter of 2023 to $1.13 billion. Tesla said it was due to the reduction in price reduction strategies for EVs and “some unexpected challenges” being reduced to the bottom line of the automaker.
Tesla tried to turn its profitable ship around, but faced continued pressure. In the second quarter of 2024, Tesla reported a $1.5 billion profit, down 45% from the same period in 2023. Profit reached a $622 million restructuring fee. Notably, its profits were padded by a record $890 million in regulatory credit sales.
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