• Tesla missed Wall Street expectations for earnings per share and revenue after mid-quarter revisions as a result of political tensions.
• Revenue and EPS were down both QoQ and YoY after earlier reports of declining deliveries.
• Falling deliveries and declining ASPs for both new and used Tesla vehicles reflect the public’s sentiment towards Musk and his support for the Trump Administration.
• In the face of poor results, Musk announced he would be dedicating a lot more of his time to Tesla in about a month.
• Despite the negative quarterly results, energy generation and storage revenues grew at a robust pace alongside services revenue.

Tesla’s Q1 2025 results were lackluster to say the least with quarterly revenue and EPS missing Wall Street estimates. Automotive revenues declined 20% YoY in Q1 2025, while net income fell a substantial 71% YoY, which Tesla attributed to increased expenses for AI and R&D projects.

However, in a bright spot, Tesla’s energy generation and storage revenues grew 67% YoY. Services revenue also grew 15% YoY. Despite waning automotive revenues, supercharger stations continued to grow, rising 14% YoY. The Tesla Supercharger network may be more insulated from impacts in relation to Elon Musk as no other charging network is as consistent or widespread as Tesla’s. With more OEMs adopting the NACS ports and gaining access to Tesla’s Supercharger network, services revenue will likely continue to chug along.

Source: Tesla

Vehicle deliveries fell roughly 13% YoY in Q1 2025. Although Musk and Tesla have attributed negative results to factors such as the Model Y refresh and foreign exchange rates, it is impossible to ignore the massive elephant in the room. Whether or not one agrees with Musk’s work in the Trump Administration, his proximity to the administration is damaging Tesla’s vehicle sales and demand.

One factor listed as a headwind for revenues was lower ASPs due to sales incentives. Reducing prices was likely necessary to keep sales moving throughout the quarter. Demand for used Tesla vehicles is also dropping off. Many Tesla owners are holding onto their vehicles for now despite many noting their displeasure with Musk. In Colorado, Counterpoint noted a growing number of Tesla drivers adding bumper stickers criticizing Musk and noting that they purchased their vehicles “before Elon went crazy”.

Source: Counterpoint Research

According to Car Guru, Tesla’s used vehicle prices are moving in the opposite direction as the rest of the used vehicle market. Its average price across all models is down 7.19% YoY compared to a 1.36% decline for the rest of the market. Used Model 3 and Model Y prices have fallen by double-digit percentages YoY. Tesla’s reported market share fell in North America while it remained somewhat flat in China. As for Europe, Tesla did not report its market share changes in the region for Q1, but it has been widely reported that sales are down significantly in all countries in Europe.

Source: Tesla Investor Relations

As for the ever-evolving tariff situation, Musk noted on the earnings call that he will continue to advocate for lower tariffs as opposed to higher tariffs, but the decision is ultimately up to Donald Trump. However, one positive advantage for Tesla versus some other competitors in North America is its domestic production capacity and “Made in the USA” content. This will help Tesla offset some of the negative impacts of the tariffs compared to its competitors in the region, potentially mitigating the declining market share.

As for FSD performance, Tesla continues to build on its extensive base of data from vehicles on roads and from vehicles it is training at the Tesla Gigafactory in Texas. These vehicles are rolling off the assembly line and driving themselves to the outbound lot capitalizing on every opportunity to build on Tesla’s existing data models.

Tesla also launched a supervised FSD model in China during Q1. It did so without access to any existing China-specific training data. However, Tesla paused this rollout after China’s Ministry of Industry and Information Technology made regulatory changes. These regulations forced Tesla to rename its service to Intelligent Assisted Driving. This signaled a more restrictive environment for ADAS systems in China and could continue to pose as a headwind for FSD revenue growth moving forward.

For the US, Musk now claims unsupervised FSD will go live in several cities later this year. However, he noted that regulatory challenges may prevent Tesla from achieving this goal. Musk’s timelines have historically been overly optimistic, so this statement can be met with some skepticism. The same can be said for the $25,000 Tesla, which the leadership team hinted is ready for production and the company could unveil by the end of 2025. Tesla’s leadership also noted that the vehicle ramp has been more delayed than expected.

During the Q1 2025 earnings call, Musk defended his work with DOGE. However, he noted that he believes his work there would be nearly complete in about a month’s time, after which he plans to dedicate a substantially larger amount of time to Tesla. While he will not entirely separate from DOGE, it is clear that he needs to reorient and focus more time and effort on getting Tesla back on track. Whether or not the damage is irreparable remains to be seen.