Tesla, the electric vehicle giant, reported a devastating 71% plunge in profits for Q1 2025, with net income dropping to $409 million from $1.39 billion the previous year, as announced on April 22, 2025.
The company’s earnings report cited a 9% revenue decline to $19.3 billion, missing Wall Street’s $21.45 billion forecast, and a 13% drop in vehicle deliveries, marking its worst quarter since 2022. Tesla attributed the downturn to “changing political sentiment,” particularly backlash tied to CEO Elon Musk’s role in the Trump administration’s Department of Government Efficiency (DOGE).
Musk’s high-profile White House position has polarized consumers, with protests outside Tesla dealerships and social media campaigns urging boycotts. Analysts note that Tesla’s aging lineup, including the Model Y and Model 3, faces stiff competition from Chinese EV makers like BYD, while the Cybertruck has underperformed expectations. The company warned that macroeconomic factors and potential US policy shifts, such as reduced EV subsidies, could further dampen demand.
Despite the gloom, Musk remained optimistic, highlighting plans for affordable models using next-generation platforms, with production slated for June 2025. Tesla’s autonomous driving initiatives, including the robotaxi project, also promise long-term growth. However, the earnings call revealed investor concerns about Musk’s divided focus, prompting him to announce a reduction in his DOGE role starting May.
This financial hit raises questions about Tesla’s resilience in a politically charged climate.