Tesla reports 20% drop in automotive revenue in Q1 2025

Tesla, the renowned US-based automotive company, recently reported a 20% decline in its first quarter revenues for 2025, ending on 31st March. The total automotive revenues were recorded at $13.97 billion, a noticeable drop from $17.38 billion in the same period the previous year.

This decline in revenue was attributed to necessary upgrades at Tesla’s four vehicle factories, which were undergoing retooling to manufacture a refreshed version of the Model Y SUV. The transition in production lines for the new Model Y resulted in several weeks of lost production time.

In a statement, Tesla explained, “During the switchover, we also prepared our factories for the launch of new models later this year. Given economic uncertainty resulting from changing trade policy, more affordable options are as critical as ever.”

Factors such as lower average selling prices and increased sales incentives also contributed to the decrease in both revenue and profit for the company. Net income attributable to common stockholders (GAAP) saw a significant 71% decline to $409 million, down from $1.39 billion, while non-GAAP net income stood at $934 million, a 39% decrease from $1.53 billion.

Overall, Tesla’s total revenues fell by 9% to $19.33 billion in the first quarter of 2025 from $21.30 billion in the previous year’s corresponding quarter. Total gross profit declined by 15% year-over-year to $3.15 million.

Despite the decline in revenue and profit, Tesla saw a significant increase in net cash provided by operating activities, which jumped by 791% from $242 million in Q1 2024 to $2.15 billion in Q1 2025. Adjusted EBITDA for the first quarter of 2025 was reported at $2.81 billion, a 17% decrease from $3.38 billion in the previous year’s corresponding quarter.

Operating expenses increased by 9% to $2.75 billion, while income from operations plunged by 66% to $1.17 billion. The company’s energy generation and storage revenue showed a 67% growth to $2.73 billion in Q1 2025 from $1.63 billion in Q1 2024, and services and other revenue grew by 15% to $2.64 billion.

Tesla expressed challenges in measuring the impacts of shifting global trade policy on the automotive and energy supply chains, cost structure, and demand for durable goods and related services. The company emphasized making prudent investments to drive growth in both its vehicle and energy businesses.

Looking ahead, Tesla plans to commence production of new vehicles, including more affordable models, in the first half of 2025. Global sales for the company fell by 13% year-on-year to 336,681 units in the first quarter of 2025, with US sales dropping by 9% to 128,100 units.

Recently, Tesla expanded its operations by launching sales outlets in Saudi Arabia, with outlets in Riyadh, Jeddah, and Dammam. The company remains focused on navigating the challenges posed by the evolving global trade landscape and ensuring sustainable growth in the automotive and energy sectors.