Tesla misses on Q1 results but claims cheaper EVs are still on track for 2025 launch

Tesla (TSLA) reported first quarter earnings Tuesday after the bell that widely missed the mark, but the company said it still expects new vehicles to launch in the first half of 2025.

Tesla reported Q1 revenue of $19.34 billion vs. $21.43 billion (Bloomberg estimate), well below the $21.3 billion reported a year ago. Tesla posted adjusted earnings per share of $0.27 vs. $0.44 estimated.

Tesla said plans for new affordable vehicles are on track for start of production in the first half of 2025 and that it still expects Robotaxi volume production starting in 2026. Along with Robotaxi testing, these were two big investor concerns heading into earnings.

Tesla stock was slightly higher in after-hours trading.

NasdaqGS – Delayed Quote • USD

The company blamed trade uncertainty as a reason behind slumping sales.

“Uncertainty in the automotive and energy markets continues to increase as rapidly evolving trade policy adversely impacts the global supply chain and cost structure of Tesla and our peers,” the company said in a statement. “This dynamic, along with changing political sentiment, could have a meaningful impact on demand for our products in the near-term.”

Because of this uncertainty, Tesla said it would revisit its 2025 guidance in its second quarter financial update and removed its long-term growth forecast.

Tesla said its first quarter gross margin hit 16.3%, better than the 16.1% expected, with automotive gross margin ex-regulatory credits coming in at 12.5%.

In the past, Tesla had promised to launch a lower-priced EV in the first half of 2025, along with other new vehicles that the company said would allow it to return to a 50% growth rate compared to 2023.

Reuters reported on Friday that Tesla’s plans to launch an affordable EV, which include a stripped-down version of the Model Y, have been delayed until later this year. Tesla has not responded to that report.

The big concern for Tesla’s bread-and-butter auto business is demand. Earlier in April, Tesla reported Q1 deliveries of 336,681 units versus 390,342 estimated, per Bloomberg consensus, making it the worst quarter for deliveries since the second quarter of 2022.

Conversely, rival automakers were seeing huge sales gains as consumers pushed up purchases to avoid tariffs, which began on April 2. Tesla’s main rival overseas, BYD (BYDDY), has been eating into Tesla’s market share for some time now. And President Trump’s auto sector tariffs of 25% on foreign imports have automakers like Tesla in a bind.

Demand concerns led to falling sales across a number of key regions for Tesla. Tesla registration data in key European regions fell in March, another sign that sales are continuing to slide as Tesla’s brand has also taken a hit due to the right-wing political activities of CEO Elon Musk.

Tesla CEO Elon Musk speaks at at March 21 employee town hall. · X.com

Musk’s closeness to President Trump and embrace of right-wing politicians in Europe have seen Musk’s and Tesla’s brands suffer. Protests both in the US and abroad at Tesla showrooms are growing, as are acts of vandalism on Tesla EVs.

“Musk needs to leave the government, take a major step back on DOGE, and get back to being CEO of Tesla full-time,” Wedbush analyst Dan Ives wrote in a report to clients on Sunday, calling it a “Code Red situation.”

Ives added, “Anyone that thinks the brand damage Musk has inflicted is not a real thing, spend some time speaking to car buyers in the US, Europe, and Asia. You will think differently after those discussions.”

Ives maintained his Tesla Outperform rating and $315 price target.

Tesla’s stock did pop around the time deliveries were released after a report from Politico said Musk was set to pare back his duties in the Trump administration “in the coming weeks.”

This story is developing. Please check back for further updates.

Yahoo Finance will have full live analysis of Tesla’s earnings results starting at 4:00 p.m. ET. You can tune in here. You can also now listen to Tesla’s earnings call live on the Yahoo Finance platform. Simply head to Tesla’s ticker page at the start time this afternoon.

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Pras Subramanian is a reporter for Yahoo Finance. You can follow him on X and on Instagram.

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