Tesla announced a significant decline in revenue and profits for the first quarter of 2025, marking a challenging period for the electric vehicle manufacturer. The company reported a 9% drop in revenue, with auto revenue falling by 20%. Adjusted income decreased by 39%, both figures exceeding forecasts.
The decline in sales is attributed to several factors, including CEO Elon Musk's controversial role in the Trump administration as the head of the Department of Government Efficiency (DOGE), which has led to protests and vandalism at Tesla facilities. Additionally, Tesla is dealing with the impact of new tariffs on auto imports imposed by President Trump, which could increase the cost of parts and materials crucial for electric vehicle production.
Despite these challenges, Tesla plans to release a more affordable model by June and launch a driverless "robotaxi" service next year.
The company's stock has experienced significant volatility, with short sellers profiting $11.5 billion from Tesla's stock decline this year, according to CNBC. Tesla's shares have fallen 44% in 2025, with concerns about tariffs and increased competition from lower-cost competitors in China contributing to the decline.