Tesla profits drop 71% amid anti-Musk backlash

Tesla's profits fell 71% over the first three months of this year, a company earnings release on Tuesday showed. The company's performance fell short of analysts' expectations.

Total revenue decreased by 9% from one year earlier, to $19.3 billion, while revenue derived from car sales plunged 20% over the first three months of 2025 compared to a year ago, the earnings showed.

The new financial details arrive as some shareholders have called on Musk -- whose temporary status as a government employee expires next month -- to step down from his White House role and return full-time to the helm of Tesla.

Opening his company's earnings call on Tuesday, Musk defended the work he was doing with the Department of Government Efficiency and commented on the Tesla protests, saying, without evidence, that the protesters were demonstrating because they were “receiving fraudulent money.”

He then called the DOGE work necessary but said that "working for the government to get the financial house in order is mostly done."

"I think starting probably next month in May, my time allocation to those will drop significantly," he said.

He added that he expected to keep working for the government one or two days a week for the remainder of President Donald Trump's presidency to "make sure that the waste and fraud that we stopped does not come roaring back." DOGE has not yet proved the fraud it alleges.

Musk added that he would start shifting more time and attention back to Tesla.

Musk also addressed the Trump administration's tariffs on Tuesday, saying, "I've been on the record many times as saying that I believe lower tariffs are generally a good idea."

"But this decision is fundamentally up to the elected representative of the people, being the president of United States," he added. "So, you know, I'll continue to advocate for lower tariffs … but that's all I can do.”

Earlier, he had said that Tesla was in a relatively good position to weather tariffs because it has localized supply chains.

In a statement ahead of the earnings call, Tesla noted that "changing political sentiment" could impact demand for the company's products in the near-term.

Tesla also cautioned about business impacts as result of the "current tariff landscape," saying the company is "taking actions to stabilize the business in the medium to long-term and focus on maintaining its health."

"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 added.

"We view this as a fork-in-the-road time," Dan Ives, a managing director of equity research at the investment firm Wedbush and a longtime Tesla booster, said in a memo to investors on Sunday ahead of the earnings release.

Tesla shares have dropped in value by roughly half from an all-time high in December. Most of those losses have come since Trump took office and Musk began his controversial governmental cost-cutting efforts as the head of the newly created DOGE.

Tesla remains a top electric carmaker but the company faces growing competition, especially from Chinese firms such as BYD.

Deliveries of Tesla vehicles over the first three months of 2025 dropped about 13% compared to the same period a year ago, the company said earlier this month.

When Tesla announced the decline in deliveries, the company made no mention of its CEO but did say that a "changeover of Model Y lines across all four of our factories led to the loss of several weeks of production in Q1," but added that "the ramp of the New Model Y continues to go well."

On Tuesday's call, Tesla CFO, Vaibhav Taneja, said, “The negative impact of vandalism and unwarranted hostility towards our brand and our people, had an impact in certain markets. Despite this, we were able to sell out legacy Model Y. We produced the legacy Model Y until the end of February."

Tesla sold fewer cars in 2024 than it did the year prior, marking the company's first year-over-year sales decline in more than a decade, earnings released in January showed.

Musk announced in late January that the company would roll out its robotaxi test program in Austin, Texas, in June. But within days, China-based competitor BYD unveiled advances in self-driving technology, which the company said was set to be included in models costing as little as $9,600.