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Tesla Signals Caution on Growth Outlook After Profits Miss Estimates
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April 22, 2025
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4:18Now PlayingBloomberg's auto reporter Craig Trudell breaks down a weak earnings report from Tesla as the company reports lower than expected profits and a murky path forward for growth.
Tesla Inc. backed away from an earlier view for 2025 sales growth and pledged to revisit its outlook next quarter, a sign that tariffs, an aging vehicle lineup and the backlash against Chief Executive Officer Elon Musk are having an impact on the electric-vehicle maker.
The company on Tuesday reported adjusted earnings of 27 cents per share for the first quarter, below the average analyst estimate. Tesla omitted an earlier prediction that sales would return to growth for the full year, saying instead that it’s “making prudent investments that will set up” the vehicle business for growth. That will depend on factors including production increases and the “broader macroeconomic environment.”
“It is difficult to measure the impacts of shifting global trade policy on the automotive and energy supply chains, our cost structure and demand for durable goods and related services,” Tesla said.
The shares were little changed at 4:18 p.m. in extended New York trading.
The dimmer outlook for the year follows a tough 2024, when the carmaker missed its annual sales growth target for the first time in more than a decade. It also fell short of analysts’ expectations for first-quarter vehicle sales, which were released earlier this month.
Musk is increasingly betting Tesla’s future on autonomy, such as a driverless taxi, and robotics, including the humanoid Optimus robot.
The dimmer outlook for the year follows a tough 2024, when the carmaker missed its annual sales growth target for the first time in more than a decade. It also fell short of analysts’ expectations for first-quarter vehicle sales, which were released earlier this month.
President Donald Trump’s tariffs are compounding Tesla’s challenges, and threaten to upend automotive supply chains globally and drive up costs across the industry. While Tesla is expected to be relatively less affected than many carmakers due to its large plants in California and Texas, its vehicles nevertheless contain some non-US components, and the company has warned of a potential impact.
Musk and his politics have also sparked backlash globally due to his ties to the Trump administration and his endorsement of controversial political positions in Europe. Tesla showrooms and charging stations have become targets for protests and vandalism, particularly in the US. Tesla Takedown, a decentralized movement that accuses Musk of harming democracies around the world, is encouraging people to sell their Tesla vehicles and the company’s stock while condemning violence and vandalism.
Earlier this week, Wedbush Securities analyst Dan Ives wrote that Tesla faces “potentially 15%-20% permanent demand destruction for future Tesla buyers due to the brand damage Musk has created with DOGE,” referring to the Department of Government Efficiency, which the billionaire has led.
The company said that “changing political sentiment” is another element that “could have a meaningful impact on demand for our products in the near-term.”
Autonomy, Robotics
Musk is increasingly betting Tesla’s future on autonomy, such as a driverless taxi, and robotics, including the humanoid Optimus robot.
“While we continue to execute on innovations to reduce the cost of manufacturing and operations, over time, we expect our hardware-related profits to be accompanied by an acceleration of AI, software and fleet-based profits,” the company said in its shareholder deck.
The automaker said plans for new vehicles, including more-affordable models, remain on track for the start of production in the first half of this year. That may come as a surprise to some investors after Reuters reported last week that the production launch would be delayed by a few months.
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