Tesla’s profits drop by 71% due to weak sales and anti-Eronmusk sentiment

Tesla Burn sales numbers According to Financial Results Released Tuesday, it threatens one of its biggest advantages over other EV players.

The electric vehicle manufacturer reported net profit of $409 million with revenue of $19.3 billion after delivering around 337,000 EVs in the first quarter of the year.

The company’s net profit reflects a 71% decline from the same period last year. This was the worst quarter for Tesla delivery in over two years, coming just after the company’s first decline in sales each year. Tesla’s revenues were eased at $595 million with a zero emissions tax credit, according to the revenue report.

The company also warned about how trade will affect business in the future.

Tesla says the trade war and “changes in political sentiment” could have “a meaningful impact on the demand for our products.” The company added, “Along with changing political sentiment, dynamics can have a meaningful impact on the demand for our products in the short term.”

The company said current tariffs directed against China “have a relatively large impact on the energy business compared to automobiles.” Tesla said it is taking action to stabilize its business from medium to long term and focus on maintaining its health.

Tesla says it is sticking to some of its more ambitious plans for a more affordable model in the first half of 2025, and is on track to get started. The vehicles use aspects of next-generation platforms and pull from existing platforms, the company said in a shareholder’s letter. The company says these inexpensive vehicles will be produced on the same production line as their current vehicle lineup.

Tesla sales are rising against many headwinds.

The company’s EV lineup is aging (although all sedans and SUVs have acquired facelifts), and its latest product, CyberTruck, is not near the hit that CEO Elon Musk thought was. It works on a low-cost vehicle that is estimated to be a Barebone Model Y, but Reuters reported this last week EVs are a few months behind. And Musk’s far-right politics, along with his involvement in the Trump administration, created a considerable backlash against the Tesla brand.

At the same time, Musk is company-oriented with the Robotaxi and Optimus Robot projects.

He has pledged to launch an early version of the Robotaxi service in Austin this June.

Musk has yet to demonstrate that Teslas can drive himself without human intervention despite his long-standing promise. Additionally, the information recently reported that an internal analysis conducted at Tesla showed that the Robotaxi program would lose money for a long period of time. Even if it’s working.

At this point last year, Tesla was working on some gloomy numbers. If forgotten, the company’s profits fell 55% from the first quarter of 2023 to $1.13 billion. Tesla said it was due to the reduction in price reduction strategies for EVs and “some unexpected challenges” being reduced to the bottom line of the automaker.

Tesla tried to turn its profitable ship around, but faced continued pressure. In the second quarter of 2024, Tesla reported a $1.5 billion profit, down 45% from the same period in 2023. Profit reached a $622 million restructuring fee. Notably, its profits were padded by a record $890 million in regulatory credit sales.