Tesla Q1 Profit Nosedives 71%; EV Maker Withdraws 2025 Sales Guidance Citing Market Uncertainty

Tesla's March quarter earnings saw a steep 71% drop in profit compared to the year-ago quarter, with net profit falling to $409mn as the electric vehicle maker grappled with softening demand, global uncertainties, and strong competition from Chinese EV major, BYD.

Its revenue for the quarter under review declined 9% on year to $19.34bn, missing the Street’s view. The EV maker’s revenue for the said quarter is the lowest Q1 sales the company has seen in three years, according to the USA Today. The automotive segment of the company recorded a 20% on-year fall in revenue for the quarter, as per a CNBC report.

The need to update assembly lines at its four vehicle factories to start making a refreshed version of its popular Model Y SUV was cited by the company as one of the reasons for such a slide in its earnings. The Elon Musk-backed firm also pointed to lower average selling prices and sales incentives as a drag on its financials for the quarter. 

In a move that must have sent shivers through the Wall Street, Tesla did not just deliver disappointing earnings—it also yanked its 2025 guidance completely off the table, citing a fog of uncertainty that has descended on the automotive and energy market.  The company said it will revisit its 2025 guidance in its Q2 update.

“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,” Tesla said in its shareholder’s deck. This “dynamic,” and “changing political sentiment” could have a meaningful near-term impact on demand for its products, it further added.

Tesla is the “least-affected car company with respect to tariffs” but he personally favors “predictable tariff structures,” as well as “free trade and lower tariffs”, CNBC reported citing Musk, as saying in an earnings call. However, the company in its shareholders' deck said, “…the current tariff landscape will have a relatively larger impact on our Energy business compared to automotive…”