- Tesla's Q1 2025 earnings showed a 71% drop in net income and a 9% decline in revenue.
- Elon Musk attributed some of Tesla's struggles to "rapidly evolving trade policy" and "changing political sentiment."
- Analysts express concerns about near-term uncertainty for Tesla, linking the company's future to Musk's involvement with the White House.
Tesla CEO Elon Musk said he would soon be spending less time with the Trump administration after first-quarter earnings fell short of expectations.
Net income for the quarter was down 71% after a decline in vehicle deliveries as Tesla battled growing competition from foreign brands, shifting trade policies and growing backlash to the brand after Musk aligned himself with the Trump administration.
"There are some challenges, and I expect that this year will be, there will probably be some unexpected bumps this year," Musk said in an earnings call April 22. "But I remain extremely optimistic about the future of the company."
Tesla sales slump during Musk's time with DOGE
The slump comes as Tesla, along with other automakers, adjusts to auto tariffs imposed by President Donald Trump.In a financial report April 22,Tesla said “rapidly evolving trade policy” has eroded the global supply chain and the company’s cost structure.
While Tesla assembles its vehicles in the United States, the automaker is exposed to tariffs because it imports parts from other countries.
"I've been on the record many times saying that I believe lower tariffs are generally a good idea for prosperity, but this decision is fundamentally up to the elected representative of the people, being the president of the United States," Musk said. "I'll continue to advocate for lower tariffs rather than higher tariffs, but that's all I can do."
Tesla also noted that “changing political sentiment” could influence product demand in the near term. The company has faced backlash after Musk began work with the Trump administration's DOGE, the cost-cutting initiative that has led to the firing of tens of thousands of federal workers.
Dealerships have suffered vandalism and protests, and polls from Pew Research and CNBC show roughly half of Americans have negative views of the tech mogul. Shares had plummeted, ending April 22 about 50% down from their December peak. And first-quarter deliveries were down 13% from a year ago, although Tesla said that was in part because of the company losing production time as it updated factories to produce the new Model Y.
“There's some good long-term growth opportunities, but there’s a lot of near-term uncertainty,” Edward Jones analyst Jeff Windau told USA TODAY ahead of Tesla's earnings call.
In a note April 20, Wedbush Securities analyst Daniel Ives hinged the company’s future on Musk’s decision on when to leave the White House, calling it a “fork in the road time.”
"Teslais Musk and Musk isTesla," Ives wrote. "If Musk leaves the White House there will be permanent brand damage ... butTeslawill 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."
Musk said April 22 that he would be spending less time with DOGE, probably starting in May.
"My time allocation to DOGE will drop significantly," Musk said. He later added, "I think I'll continue to spend a day or two per week on government matters for as long as the president would like me to do so, and as long as it is useful."
Trump has suggested Musk’s time at the White House was nearing an end, although he said he would “keep him as long as I could keep him.”
As a special government employee, Musk has 130 days per calendar year to work for the federal government. That window is set to expire in late May.
Tesla says new vehicle launch on trackfor 2025
Musk said Tesla was still on track to begin producing new vehicles, including more affordable models, in the first half of 2025.
“Auto deliveries have been under pressure this year, and the lower-cost vehicles were being counted on to help increase delivery volumes,” Windau of Edward Jones said in a report April 21.
Musk said the company is making "good progress" on its Optimus humanoid robots and expects to have thousands working in Tesla factories by the end of the year. He said he is confident the company can get to 1 million units a year by 2030.
Musk also said the Texas-based company is “laser-focused” on launching arobotaxi service in Austin this June, with 10 or 20 vehicles ready on Day One. As for personal use, he said, Tesla vehicles will be able to drive themselves before the end of the year.
"Can you go to sleep in your car and wake up at your destination?" Musk asked. "I'm confident that will be available in many cities in the U.S. by the end of this year."
Musk has a history of overestimating how quickly Tesla can deliver new products. In 2015, he said Tesla would deliver fully self-driving cars within three years. In 2019, he said he was confident Tesla would have operational robotaxis by 2020. Tesla has yet to launch either.
Tesla stock after hours
Tesla stock was up more than 5% in after-hours trading after ended Tuesday up 4.6% at $237.97.
This story has been updated to add new information and video.
