Tesla profits drop 71% on weak sales and anti-Elon Musk sentiment

Summary

Tesla’s flailing sales figures have put the company closer to the red than it has been in years, according to financial results released Tuesday, threatening one of its biggest advantages over other EV players. The electric automaker reported $409 million in net income on $19.3 billion in revenue after delivering almost 337,000 EVs in the first quarter of the year. The company’s net income reflects a 71% drop from the same quarter last year. It was the worst quarter for Tesla deliveries in more than two years and came on the heels of the company’s first-ever year-to-year drop in sales. Tesla’s income was buffeted by selling $595 million in zero-emissions tax credits, according to its earnings report — without those, it would have posted a loss. Tesla also cautioned shareholders about how the trade war may affect its business moving forward. Tesla says President Trump’s tariffs and “changing political sentiment” could have a “meaningful impact on demand for our products.” The company noted the current tariffs, the bulk of which are directed at China, will have “a relatively larger impact on our Energy business compared to automotive.” Tesla said it is taking actions to stabilize the business in the medium to long-term and focus on maintaining its health. Tesla did stick to some of its more ambitious plans around more affordable models, stating it remains on track for start of production in the first half of 2025. These vehicles will use aspects of a next-generation platform and pull from its existing one, the company said in its shareholder’s letter. These cheaper vehicles will be produced on the same manufacturing lines as our current vehicle lineup, the company said. Tesla’s sales are up against a number of headwinds. The company’s EV lineup is aging (though the sedans and SUVs have now all gotten facelifts) and its newest product, the Cybertruck, is nowhere near the hit that CEO Elon Musk thought it could be. It is working on a lower-cost vehicle that is speculate...