Tesla has released its financial results for the first quarter of 2025, showing a big drop in profits and a noticeable slowdown in electric vehicle (EV) sales.
The company made $409 million in profit on $19.3 billion in revenue after delivering nearly 337,000 vehicles worldwide. That’s a 71% drop in profit compared to the same time last year, and it marks Tesla’s worst quarter for vehicle deliveries in over two years.
Much of that profit came from selling $595 million in environmental credits to other companies. Without that extra income, Tesla would have ended the quarter with a loss.
Tesla said several challenges affected its performance this quarter. One major issue is the ongoing trade war between the U.S. and China. New tariffs, the company warned, could hurt sales, especially in its solar and energy storage business.
Tesla also said that political changes and global uncertainty could affect how much people want to buy its products.
Despite these concerns, Tesla is sticking to its plan to launch more affordable electric vehicles. The company says it’s still on track to begin building these lower-cost models in the first half of 2025.
These vehicles will use parts of Tesla’s upcoming platform but will mostly be built using the same systems already used for the Model Y and Model 3.
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This update comes after a recent news report claimed that these new vehicles were delayed, but Tesla says that’s not true.
Tesla’s current lineup is also showing signs of age. While the Model S, Model 3, and Model Y have all had design updates, they’re still based on older platforms. The company’s newest model, the Cybertruck, hasn’t sold as well as expected.
At the same time, CEO Elon Musk is putting more focus on future projects like Robotaxis and the Optimus humanoid robot.
The first version of the Robotaxi service is expected to launch in Austin this June, though Tesla hasn’t shared many details yet. Some internal reports suggest the Robotaxi business could lose money for quite a while, even if it works as planned.
This tough quarter follows a rough 2024. In the first quarter of last year, Tesla’s profit fell by more than half. Things didn’t improve much in the second quarter either, when profits dropped again, partly because of a major restructuring and more price cuts.
Tesla says it remains committed to improving efficiency, developing new products, and growing over the long term. But for now, the company faces serious challenges, both from the market and from inside its own business.
