Tesla reported first-quarter 2025 earnings that fell short of analysts’ expectations, with revenue declining to $19.34 billion and earnings per share dropping to $0.27. This performance was attributed to a 20% decrease in automotive sales and a 13% year-over-year decline in vehicle deliveries. The company also experienced a reduction in automotive gross margins to 12.5%, down from 13.6% in the previous quarter.
In response to investor concerns and the company’s underperformance, CEO Elon Musk announced plans to reduce his involvement in the U.S. government’s Department of Government Efficiency (DOGE) and dedicate more time to Tesla’s operations. Musk’s political activities had been linked to brand damage and declining sales, prompting this strategic shift.
Despite the earnings miss, Tesla’s stock rose over 5% in after-hours trading, reflecting investor optimism about Musk’s renewed focus on the company. Looking ahead, Tesla plans to revisit its full-year guidance in the next quarter, considering the impacts of shifting global trade policies and economic uncertainties. The company also reaffirmed its commitment to launching a more affordable Model Y in early 2025 and introducing its robotaxi service in Austin by June.
