Tesla reports 20% drop in car sales revenue

Tesla reported weaker-than-expected financial results in the first quarter of 2025. The company's total revenue fell 9% year-on-year to $19.34 billion, and earnings per share were 27 cents instead of the expected 39 cents. The biggest decline was recorded in the automotive sector: revenue fell 20% to $14 billion. The company's net profit fell 71% to just $409 million, CNBC reports.

The decline was attributed to a revamp of production lines for the new Model Y, a drop in the average selling price, and numerous discounts. Tesla also faced the impact of the Trump administration's tariff policies, which could make it more difficult to access imported components. While Musk said Tesla would be least affected by the tariffs, the company did not provide growth forecasts for 2025 and postponed an update on guidance until next quarter.

Tesla also faces stiff competition from cheaper Chinese electric car makers and is losing ground in the self-driving taxi segment dominated by Waymo. At the same time, the company plans to launch its robo-taxi service in June in Austin, Texas, and to set up a pilot production of humanoid robots in California.

Despite the difficulties in the auto sector, the energy division showed growth of 67%, to $2.73 billion. Tesla sees a prospect in energy-saving systems due to the growing demand for infrastructure for artificial intelligence. However, the company warns investors about the risks associated with market instability and trade policies affecting costs and global supply chains.