Tesla reports 71% drop in Q1 profit as political backlash and competition hit performance
Tesla's stock slides after 71% drop in quarterly profit amid political backlash and delivery slump
Tesla Inc. reported a 71% plunge in net profit for the first quarter of 2025, down to $409 million from $1.39 billion a year earlier, missing Wall Street’s revenue estimates by over $2 billion. Revenue fell 9% to $19.3 billion, while vehicle deliveries dropped 13% to 336,681 units.
The company’s stock has shed more than 40% year-to-date, reflecting market anxiety over weakened financial performance and growing public backlash against CEO Elon Musk’s political activities.
Musk’s involvement with the Trump administration’s Department of Government Efficiency (DOGE), which oversaw mass federal layoffs and agency closures, sparked global protests and property damage at Tesla facilities. In Germany, Tesla’s sales plunged 60% in January amid consumer boycotts and criticism of Musk’s ties to the far-right AfD party. Amid mounting criticism, Musk announced he would reduce his government involvement to one or two days a week beginning in May. Following this announcement, Tesla stock rose 5% in after-hours trading.
TSLA price dynamics (January 2025 - April 2025) Source: TradingView.
Competitive, technical, and operational headwinds persist
Beyond political turbulence, Tesla is grappling with intensified competition from Chinese EV makers like BYD, delays in the rollout of a lower-cost Model Y variant, and the postponed launch of its robotaxi program in Austin. Its self-driving software remains under federal investigation, amplifying investor concerns over safety.
Despite these setbacks, Tesla’s energy business showed resilience, with a 37% rise in revenue from energy generation and storage. However, analysts warn that reputational damage from Musk’s political activities may have lasting effects on consumer trust and long-term brand value. Some shareholders have publicly called for Musk to relinquish his political roles to protect Tesla’s global standing.
Technically, Tesla trades near the lower Bollinger Band at $219.12, with the MACD just beginning to show a possible bullish crossover. The RSI at 43.75 and the price hovering below all major EMAs confirm lingering bearish momentum. Support lies at $225–$230; a break below could expose $190. On the upside, reclaiming $255 is essential for trend reversal.
In prior reports, we noted Tesla's growing vulnerability to geopolitical factors and leadership distractions. With sentiment still fragile, the focus now shifts to Musk’s promised operational refocus and potential product updates in Q2.
