Tesla Net Income Falls 71% in First Quarter

Tesla reported a 71% year-over-year decline in net income for Q1 2025, driven by weakening global demand and political backlash tied to CEO Elon Musk’s role in the Trump administration. Revenue fell 9% to $19.3 billion, with automotive revenue dropping 20%, while its energy business grew by 67%. Adjusted earnings-per-share were $0.27, missing analysts’ expectations of $0.41. Global vehicle deliveries decreased 13%, with sharp sales declines in key markets: a 22% drop in China, 62% in Germany, and a loss of market share in California from 56% to 44%. Tesla’s operating margin contracted to 2.1%, down from 5.5% a year earlier. Carbon credit revenue rose to $595 million, a notable year-over-year increase. Consumer sentiment has soured, with the brand facing store protests and vandalism in the U.S. and Europe due to Musk’s polarizing affiliations. Analysts also cited delayed purchases ahead of a refreshed Model Y launch. In response, Tesla introduced a more affordable Cybertruck model at $69,990 and plans to lower costs on the Model Y to revive demand.