Giant Electric Vehicle (EV) maker Tesla released its first quarter (Q1) earnings on Tuesday, marking its weakest performance since 2021.
Tesla reported a 20% decline in Q1 revenue 2025, which ended on 31 March. Total automotive revenues were posted at $13.97bn, compared to $17.38bn in the same period. The EV maker attributed the decline to the necessary upgrade at its factories.
Net income decreased significantly by 71% to $409m, down from $1.39m. Adjusted earnings were $0.27 per share and $19.3 billion in revenue, falling short of FactSet estimates of $0.41 EPS and $21.3 billion. This represents Tesla’s lowest sales since Q2 2022 and the least profitable quarter since Q1 2020. Revenue dropped 9% year-over-year from $21.3 billion, while net income plummeted 71% to $409 million from $1.4 billion in Q1 2024.
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Tesla attributed the massive revenue decline to shifting global trade policies, macroeconomic uncertainty, and its investment in autonomy and production ramps.
In a press release, the company said,
“It is difficult to measure the impacts of shifting global trade policy on the automotive and energy supply chains, our cost structure, and demand for durable goods and related services. While we are making prudent investments that will set up both our vehicle and energy businesses for growth, the growth rate 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. We will revisit our 2025 guidance in our Q2 update.”
Tesla’s global sales fell by 13% year on year to 336,681 units in the first quarter of 2025, including a 9% drop in US sales to 128,100 units. Amidst the decline, the company’s CEO Elon Musk says his time allocation to DOGE will drop significantly starting next month, noting that he will devote far more time to Tesla.
He wrote on X,
“The large slug of work necessary to get the DOGE team in place is mostly done; I’ll continue to spend 1-2 days per week as long as the President wants me to.“
Recall that Elon Musk was appointed by U.S President-elect Donald Trump, in November 2024, to lead the Department of Government Efficiency (DOGE), alongside Vivek Ramaswamy, due to his reputation as a cost-cutting entrepreneur and his significant financial support for Trump’s 2024 campaign.
Trump tasked DOGE with slashing federal spending, reducing bureaucracy, cutting regulations, and restructuring agencies. Musk’s role as a “special government employee” leverages his experience in optimizing operations at companies like Tesla and SpaceX, where he drastically reduced costs, such as cutting X’s workforce by 80% after its acquisition.
However, following his involvement in political affairs, Tesla investors expressed concerns that Elon Musk’s deep involvement with the Department of Government Efficiency (DOGE) was diverting his attention from the EV company, negatively impacting its performance and stock value.
Analyst Daniel Ives of Wedbush Securities noted in March 2025 that Musk’s focus on DOGE was “hurting investor confidence,” as Tesla faced challenges like dismal earnings and warned of potential setbacks from Trump’s tariff policies. Posts on X echoed this sentiment, with users like @DrJStrategy observing that Tesla’s stock was being “pounded” by Wall Street as Musk prioritized government efficiency efforts.
Critics argued that Tesla, at a critical juncture for its autonomous vehicle rollout, needed Musk’s full attention, especially given ongoing federal investigations into Tesla’s Autopilot system and competitive pressures in the EV market. However, some others like DivesTech, countered that Musk’s DOGE role wouldn’t significantly detract from Tesla’s long-term goals, citing his ability to multitask.
Looking Ahead
Musk limiting his DOGE time could benefit Tesla by allowing him to address declining sales, rebuild brand trust, and focus on autonomous driving and new models.
Elon Musk said he’ll “significantly” scale back the time he spends working with DOGE starting next month, shifting more of his attention to his role as Tesla CEO. Speaking on a conference call to discuss the EV maker’s quarterly results, Musk said his work getting DOGE in place is “mostly done” and he plans to spend a day or two per week working on government issues. Addressing the White House’s tariff policies, Musk said he’ll “advocate for lower tariffs.”