Tesla’s financial report for the first quarter of 2025 was released, revealing a sharp drop of 20% in revenue from its automotive business compared to the same period last year. Both revenue and profit fell short of expectations.
On Tuesday, April 22, Tesla, the American electric car manufacturer, announced its first-quarter financial results. The total revenue decreased by 9% compared to the same period last year, dropping to $21.3 billion from $23.4 billion. The revenue from automotive business also fell by 20% from $17.4 billion to $14 billion.
One of the reasons cited by Tesla for the revenue decline was the upgrading of production lines at four car factories to start producing an upgraded version of its popular Model Y SUV. The company also noted that lower average selling prices and sales incentives weighed on both revenue and profit.
Moreover, Tesla’s net profit in the first quarter plummeted by 71% to $409 million, down from $1.39 billion in the same period last year.
Tesla’s CEO, Elon Musk, has spent most of this year at the White House overseeing the reduction of the federal government’s size.
President Trump’s comprehensive tariff plan launched in early April has raised concerns about the rising costs of key components and materials for electric car production. These components and materials include manufacturing equipment, car glass, printed circuit boards, and battery cells.
Tesla’s stock price has dropped by 41% so far in 2025, experiencing the largest quarterly decline since 2022. In after-hours trading on Tuesday, the stock remained relatively stable.
At the shareholders’ meeting, Tesla warned investors that the evolving trade policies have an adverse impact on its global supply chain and cost structure, intensifying uncertainties in the automotive and energy markets.
The company indicated that this “dynamic” and “ever-changing political sentiment” could have a significant impact on Tesla’s demand in the short term.
Earlier this month, Tesla announced a 13% decrease in deliveries to 336,681 vehicles. Tesla attributed part of the delivery decline to temporary factory shutdowns for upgrading production lines to begin producing an upgraded version of its popular Model Y electric SUV.
Tesla has pledged to launch its first driverless ride-hailing service in Austin, Texas, in June. Currently, the self-driving taxi market in the US is largely dominated by Waymo, a subsidiary of Alphabet.
Furthermore, Tesla will begin production of humanoid robots on a pilot production line in Fremont, California, later this year.