Tesla saw a 9% drop in revenue year over year in the first quarter of 2025. The company brought in $19.3bn in revenue, well below Wall Street expectations of $21.45bn. The company reported an earnings per share of 27 cents, also well under investor expectations of 43 cents in earnings per share. Company sales plummeted in the first three months of the year. The company suffered a 13% drop in sales, making it the company’s worst quarter since 2022. Tesla closed the quarter with 336,681 vehicles delivered. Analysts attribute the company’s difficulties to a number of factors, but ultimately conclude Elon Musk’s role in the White House has caused a branding crisis for Tesla. The company is at a major crossroads, analysts say, that will only be remedied if Musk leaves his role in the so-called “department of government efficiency” and returns to Tesla as CEO full time. Musk is scheduled to leave Doge on May 30, a strict 130-day cap on his service as a special government employee. In addition to a drop in sales, a 50% dip in share prices, existing Tesla owners are looking to sell their vehicles in droves, Teslas have been vandalized across the country and in response to ongoing protests of the automaker, the Vancouver International Auto show removed the electronic carmarker from its March lineup. The company also recalled 46,000 Cybertrucks – nearly all that had been sold. “If Musk leaves the White House there will be permanent brand damage…but Tesla will have its most important asset and strategic thinker back as full time CEO to drive the vision and the long term story will not be altered,” read a Wedbush Securities analyst note. Wedbush remained bullish on the company’s chances of turning its financials around. “IF Musk chooses to stay with the Trump White House it could change the future of Tesla/brand damage will grow.” The company also declined to provide forward-looking guidance for the next quarter citing “shifting global trade policy on the automotive and energy supply chains”. “While we are making prudent investments that will set up both our vehicle and energy businesses for growth, the rate of growth this year will depend on a variety of factors, including the rate of acceleration of our autonomy efforts, production ramp at our factories and the broader macroeconomic environment,” the earnings report reads. “We will revisit our 2025 guidance in our Q2 update.” Though Musk has acknowledged there have been “rocky moments” of late, he remained optimistic about the company’s future at a March company all-hands meeting where he urged employees to hold onto their stocks. “But what I’m here to tell you is that the future is incredibly bright and exciting, and we’re going to do things that no one has even dreamed of,” Musk told employees. Analysts are looking to hear more about Musk’s role in the White House and how tariffs will affect the company’s production, but many investors have already lowered their expectations in anticipation of a tough quarterly report. “At this point the Street has already cut 2025 deliveries from the 2 million/1.9 million level to 1.7 million/1.65 million and EPS is now around $2 and could go lower,” the Wedbush analyst note read.
Author: Johana Bhuiyan