Tesla Earnings Takeaways: Numbers Are Bad, Not Abysmal. DOGE Marches On. Musk Losing Tariff Battle.
April 28th, 2025
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There's been plenty of chatter about Tesla's Q1 earnings call last week. Beyond just giving updates on the company's status, the call also shed some light on current administration policies affecting the industry. It's definitely worth the hour-and-a-half listen—we tuned in, and here are the key takeaways.
The Numbers
Tesla’s Q1 numbers weren’t exactly impressive. Automotive revenues came in at $13.967 billion, a 20% drop compared to the same quarter last year. Total revenue for the quarter hit $19.335 billion, down 9% from a year ago. However, the Service and Energy divisions did notably better than automotive. Margins provided the quarter’s lone bright spot, with Tesla reporting a first-quarter gross margin of 16.3%, slightly beating the expected 16.1%. Automotive gross margin, excluding regulatory credits, stood at 12.5%.
Vehicle production and deliveries were both down year-over-year, by 16% and 13%, respectively. Tesla's leadership team highlighted that Model Y production took a substantial hit because all production lines simultaneously transitioned to the refreshed model, known internally as "Juniper," during Q1. This meant several weeks of disrupted production on the company’s top selling model.
We've been closely tracking Tesla’s 2025 inventory—check out our recent article, “Tesla Inventory Swells to Record Highs in North America.” Indeed, inventory levels have ballooned, with the sole exception being the refreshed Model Y. With this major transition now complete, all eyes will be on CarFinderZone’s real-time tracking data for Q2. If inventories continue to build up, Tesla could be facing a rough road ahead.
Musk Cutting Back Time, Not Quitting DOGE
If you were hoping Tesla CEO Elon Musk would soon step back from politics, you’re out of luck. Musk announced he's merely reducing—not quitting—the time he dedicates weekly to DOGE, the controversial Department of Government Efficiency he's leading. Starting in May, Musk expects to spend about one or two days per week there, giving us a clearer sense of how deeply involved he is with Washington right now. He emphasized clearly that as long as the president needs him—or as long as it makes sense—he'll remain engaged in this political endeavor.
Musk kicked off the earnings call by explaining to investors that he sees DOGE's mission as critical to America's survival. It doesn't get much more serious than that from our perspective.
But realistically, the tweets, headlines, and political drama show no signs of slowing down anytime soon. The big question now is: How much damage will this constant political spotlight continue to do to Tesla’s brand? When the Q2 numbers roll in, we'll have the first clear picture of what this new political reality means for the company.
Musk Is Losing the Tariff Battle
When a Morgan Stanley analyst pressed Elon Musk about the potential economic fallout from tariffs in the U.S. and globally, Musk responded plainly: “I’m one of the many advisors to the president, I’m not the president.” This likely references his very public disagreements with Trump advisor Peter Navarro, who's largely credited as the architect behind the administration's current tariff strategy.
Musk clearly positioned himself outside the tariff camp, emphasizing that he understands their potential harm—not only to Tesla’s business but also to the broader U.S. economy. Still, Tesla’s leadership believes their company will weather the tariff storm better than many competitors.
So far, plenty of economists and CEOs have been betting that tariffs won’t stick around for long. But if we take Musk’s word at face value, it looks like tariffs might be here to stay—at least as long as the current administration remains in power.
Robo Taxi Coming to Austin This Summer
Tesla expects to roll out its Robo Taxi service in Austin this summer, using current production models—likely the Model Y. This initiative places Tesla directly head-to-head with Waymo, but it shouldn’t be confused with the upcoming Cyber Cab, a totally new vehicle that's planned for much later. When asked about fleet size, Musk mentioned a modest start, likely around 20 to 30 vehicles. This deployment will be the first real-world test for Tesla’s Full Self-Driving software, giving us a clear idea of where the company’s autonomous technology really stands.
Musk also spent considerable time defending Tesla’s decision to avoid expensive sensor technologies in its FSD system. While most competitors have opted to incorporate lidar sensors into their solutions, Tesla is doubling down on a camera-only approach, designed to mimic human vision. This decision is bold, and the outcome remains uncertain. If Tesla manages to succeed with this strategy, it would provide a massive competitive edge by significantly lowering hardware costs.
New Models
Tesla’s leadership team highlighted the advantage of simplifying their product lineup by reducing the number of vehicle form factors. They pointed to the historical business case of Nokia versus Apple’s iPhone, noting how Apple dominated the market with essentially one main model, while Nokia struggled with too many options. It's still unclear exactly what this means for Tesla’s future product strategy, but it suggests that simplicity and streamlined offerings will play a big role going forward.
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