WASHINGTON, DC - MARCH 11: U.S. President Donald Trump and White House Senior Advisor, Tesla and SpaceX CEO Elon Musk sit in a Model S on the South Lawn of the White House on March 11, 2025 in Washington, DC. Trump spoke out against calls for a boycott of Elon Musk’s companies and said he would purchase a Tesla vehicle in what he calls a ‘show of confidence and support’ for Elon Musk. (Photo by Andrew Harnik/Getty Images)
San Diego, California – Tesla reported a dramatic 71% drop in profits for the first quarter of 2025, deepening concerns over the electric vehicle giant’s future as competition heats up and political controversies swirl around CEO Elon Musk. The company earned $409 million in the first three months of the year, down from $1.4 billion in the same period last year.
The sharp decline may increase investor pressure on Musk to scale back his involvement with former President Donald Trump and refocus on stabilizing Tesla’s business. The company cited economic uncertainty and shifting global trade policies as key factors, but analysts say the damage goes deeper.
Tesla’s earnings missed Wall Street expectations by a wide margin. The company would have reported an even steeper loss if not for $400 million in interest income and $595 million from selling regulatory credits to other automakers who failed to meet emissions standards.
“This is the worst performance I’ve seen in Tesla’s history,” said Ross Gerber, CEO of investment firm Gerber Kawasaki, on X.
Sales have slipped amid intense competition from Chinese electric vehicle makers like BYD and legacy automakers such as General Motors, Volkswagen, and Hyundai, which are rapidly expanding their EV lineups. Tesla’s lack of new models and growing political backlash over Musk’s alignment with far-right causes and the Trump campaign have reportedly turned off many liberal and centrist consumers.
Tesla remains the most valuable automaker by market capitalization and leads the U.S. in EV sales. Still, its stock has lost roughly 50% of its value since mid-December, reflecting growing investor unease.
In a shareholder letter, Tesla warned that “changing political sentiment” could have a “meaningful impact on demand” for its products. The company also declined to provide a sales or profit forecast for the rest of the year, citing economic instability and uncertain global trade conditions.
Despite the disappointing financials, Tesla shares rose nearly 4% in after-hours trading, potentially reflecting investor hopes for a turnaround or confidence in the company’s long-term strategy.
Still, as Tesla’s dominance faces new threats and Musk’s polarizing public profile increasingly affects consumer perception, the automaker’s path ahead looks more uncertain than ever.
