Tesla has reported a sharp drop in both revenue and earnings for the first quarter of 2025, underscoring the growing challenges facing the electric vehicle maker.
Revenue fell by 9% year-on-year, with automotive revenue down a striking 20%. Adjusted income also tumbled 39%, marking the steepest quarterly decline in the company’s history.
In a statement, Tesla cited global trade tensions and uncertainty as major contributors to the disappointing performance. “It is difficult to measure the impacts of shifting global trade policy on the automotive and energy supply chains, our cost structure and demand for durable goods and related services,” the company said.
While Tesla has less exposure to international tariffs than many of its rivals, recent geopolitical volatility has forced the company to signal a possible revision of its 2025 outlook.
Analysts, however, point to political fallout as a key driver of declining demand. CEO Elon Musk’s controversial appointment as head of the Department of Government Efficiency (DOGE) in the Trump administration has triggered widespread protests and backlash. Demonstrations outside Tesla showrooms, vandalism, and a sharp fall in European sales—particularly in Germany and the UK—have compounded the company’s woes, as Musk’s support for far-right political parties in those countries alienates a significant customer base.
Despite the gloomy report, Tesla shares were only marginally lower, buoyed by the company’s reaffirmation of plans to release a more affordable model by June and its long-promised “robotaxi” service later this year. Skepticism remains, however, as both initiatives have faced repeated delays.
