Tesla Suffers 71-Percent Drop in Net Profits in First Quarter of 2025

Tesla announced a net profit of $409 million USD for the first quarter of 2025, a 71-percent decrease compared to the same period last year. Many analysts are attributing that to a toxic combination of factors: A decline in global sales, a lack of new products and Elon Musk's political activism.

Total revenue for the quarter fell by 9.2 percent to $19.3 billion. Automotive revenue, more specifically, plummeted by 20 percent to $12.9 billion.

Saved by carbon credits
Tesla generated $595 million by selling emission credits to other automakers — an increase from the $442 million the previous year. Without these credits, Tesla would have recorded a net loss for the January to March period.

Musk pulling back from government involvement
Elon Musk said during the investment call announcing results that he will spend less time as an advisor to Donald Trump and head of the Department of Governmental Efficiency (DOGE). He will continue to dedicate "one or two days a week" to it, but "starting in May, this involvement will decrease significantly."

Musk claimed he advocates for free trade in his discussions with Trump, despite the heavy taxes imposed on cars and parts imported from Mexico and Canada. However, he acknowledged that his political engagement has provoked a negative reaction.

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