Tesla Earnings Plunge, Weakest Quarter Since 2021

• Earnings Tumble to 4-Year Low on Price Cuts and Weak Deliveries

• Shares Rise 6.5% as Musk Reduce Involvement from DOGE to Refocus on Tesla

By Kenzie Aryasatya, Fayza Nawra Avanitanya, Muthia Noor Safitri, Imam Fakhri Prayogo Harianto 

April 25, 2025 at 16:30 GMT+7

Tesla posted its weakest quarterly results since 2021, with first-quarter 2025 net income falling over 50% year-over-year to US$1.13 billion. Revenue declined to US$21.3 billion, falling short of Wall Street’s consensus estimate of US$22.15 billion and marking a sequential drop from US$23.3 billion in Q4 2024. 

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The sharp decline was primarily driven by a combination of aggressive price cuts and lower delivery volumes. Tesla reduced prices across its global vehicle lineup throughout 2023 and early 2024 to sustain demand, but this strategy significantly eroded average selling prices and profitability. 

The company’s gross margin contracted to 17.4%, a notable drop from 19.3% a year ago, while deliveries declined 9% from Q4 2024, further weakening top-line performance.

Elon Musk Joins President Trump In The Oval Office | Source: Getty Images

As Tesla navigates margin compression and a softening EV market, CEO Elon Musk reaffirmed the company’s long-term innovation roadmap. During the Q1 earnings call, Musk confirmed that Tesla is accelerating development of a next-generation, low-cost electric vehicle, with a potential launch within the first half of 2025.

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This vehicle, expected to be produced using Tesla’s unboxed assembly process, is aimed at expanding affordability and market penetration. In addition, Musk reiterated that Tesla will begin robotaxi production later this year as an effort to diversify its revenue base and solidify its presence in autonomous mobility. 

Notably, Musk announced he would reduce his involvement with the US Department of Government Efficiency (DOGE), a political initiative he has been closely associated with, to refocus on Tesla’s core operations. This move follows mounting investor concern that external engagements were distracting from the company’s execution priorities.

Tesla Cybertruck Display | Source: Tesla

Despite reporting its worst quarterly earnings in years, Tesla’s shares rose 6.5% in after-hours trading following the earnings release. The market reaction appears to reflect growing investor optimism surrounding Tesla’s recently revealed product roadmap and intensified focus on cost-efficiency. 

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These initiatives are seen as potential drivers for long-term growth and a way to regain momentum amid slowing demand and increased competition in the electric vehicle market. The roadmap hints at upcoming innovations, while the cost-cutting measures aim to improve operational resilience. However, despite the positive market sentiment, analysts remain cautious about Tesla’s execution strategy. 

Concerns persist regarding the ambitious timeline for new product rollouts and the company’s ability to restore its profit margins, which have been under pressure in recent quarters. As a result, while the stock saw a short-term boost, questions about Tesla’s long-term performance remain unresolved among industry observers.

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Source:

CNBC

FORBES

REUTERS