Tesla earnings report shows cost of Musk’s work with Trump administration
Tesla is seeing its lead over other electric car manufacturers shrink. Quarterly figures released Tuesday show that the automaker has lost considerable ground. With only $409 million in net profit on sales of $19.3 billion, and nearly 337,000 vehicles delivered in the first quarter of 2025, profits fell a whopping 71% from the same quarter last year.
It is Tesla’s worst quarter in terms of deliveries in more than two years. Tesla also warns of the potential impact of ongoing trade tensions and changing political attitudes worldwide. “The trade war and shifting political sentiments could significantly affect demand for our products in the near term,” the company said in a statement.
According to Tesla, the current tariffs, especially aimed at China, will primarily affect the company’s energy business more so than car production, which is primarily concentrated in California. The company stressed that it is taking steps to stabilise the business in the medium to long term.
Tesla faces several challenges. The current model lineup – consisting mainly of refurbished sedans and SUVs – is beginning to age. The long-awaited Cybertruck is not proving a sales success with initial expressions of interest not translating into sales.
A cheaper model car, presumably a simplified version of the Model Y, could appeal to the market, but according to Reuters, its introduction has been delayed by months.
Musk himself is also under fire. His outspoken right-wing political views and ties to the Trump administration are leading to reputational damage. Thousands of Tesla drivers worldwide now have a sticker on their bumper with texts like ‘I bought this before Elon went crazy’. In several cities, people have been taking to the streets to demonstrate at Tesla dealerships. For example, 350 people marched on a Tesla dealership in Portland, Oregon, to express their dissatisfaction.
“Musk should leave the government, take a big step back on DOGE [Department of Government Efficiency] and become Tesla’s full-time CEO again,” said Wedbush analyst Dan Ives.
However, Tesla’s focus is shifting to emerging technologies, such as a driverless taxi service and the humanoid Optimus robot. Musk announced that the first robot taxis would launch in Austin, Texas, as early as June, with possible rollout to other cities later this year.
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