By John Meyer, consultant in financial affairs – Eurasia Business News, April 22, 2025. Article No 1489.

Tesla’s net income for the first quarter of 2025 plunged by 71%, reflecting a significant profit decline amid political backlash and operational challenges. The company reported earnings per share (non-GAAP) of $0.27, missing Wall Street expectations which were around $0.35 to $0.41 per share. Revenue also fell short, coming in at $19.3 billion versus estimates near $21.3 billion.

Several factors contributed to this downturn. Tesla experienced a 13% drop in vehicle deliveries, totaling 336,681 units, partly due to production halts and upgrades across its factories to transition to refreshed Model Y lines. Despite producing over 362,000 vehicles, the delivery shortfall impacted revenue and profitability.

Moreover, Tesla’s stock has been under pressure due to CEO Elon Musk’s political controversies, including his alignment with right-wing politics and involvement with the Trump administration’s advisory body, which has drawn criticism and may have dampened investor sentiment and consumer enthusiasm. This political backlash, combined with intensified competition from Chinese, European, and North American automakers, has weighed on Tesla’s market performance and margins.

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Tesla’s gross margin fell to 16.3%, the lowest in over a decade, signaling margin compression amid rising costs and competitive pressures. The company’s reliance on regulatory credit sales—$595 million in Q1—was crucial to avoiding a loss, highlighting underlying operational challenges.

Tesla’s sharp profit decline in Q1 2025 is driven by production disruptions, delivery shortfalls, mounting political backlash against CEO Musk, and fierce competition, all contributing to a weaker financial performance and investor uncertainty.

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© Copyright 2025 – Eurasia Business News. Article no. 1489.