Tesla is starting 2025 with a financial skid. The electric vehicle giant, led by Elon Musk, reported a sharp 20% year-over-year drop in automotive revenue for the first quarter, bringing in $13.97 billion compared to the same period last year.
During the company’s earnings call, Musk announced he would significantly reduce his involvement in DOGE — the Department of Government Efficiency — a Trump-era initiative he helped launch. The move comes as Tesla grapples with mounting challenges, both financial and political.
Total revenue for the quarter — encompassing automotive, energy generation and storage, and services — reached $19.3 billion, down 9% from the prior year. The dip, Tesla said, was driven by fewer vehicle deliveries and lower average selling prices, partially due to ongoing updates to the Model Y across all four of its factories.
Tesla delivered 323,800 vehicles in the first quarter, a noticeable drop from the 386,810 units shipped in the same timeframe last year. The decline follows weeks of protests and unrest tied to Musk’s political affiliations and his role in DOGE.
While the company’s automotive division struggled, its energy segment saw a 67% year-over-year revenue boost, bringing in $2.73 billion. Services and other revenue also rose 15%, totaling $2.64 billion.
Still, profit margins took a major hit. Net income fell 71% to $409 million, with diluted earnings per share dropping 40% to $0.27. Operating margin shrank by 343 basis points to 2.1%.
Tesla cited global trade uncertainties and shifting political winds as key threats to future performance. “Rapidly evolving trade policy is impacting the global supply chain and cost structure not just for Tesla, but across the industry,” the company warned.
Looking ahead, Tesla said it remains committed to launching new, more affordable vehicles in the first half of the year. But it acknowledged that growth would be heavily dependent on factory ramp-ups, progress on autonomous driving, and the broader macroeconomic climate.
Despite the rough quarter, Tesla’s product lineup remains expansive, including the Model S, 3, X, Y, the Cybertruck, and its electric semi-trucks — all part of what Musk calls a long game in the EV and energy markets.