Tesla Inc [TSLA]
0.49%
$
323.24 Exchange: NASDAQ Sector: Consumer Cyclical Industry: Auto Manufacturers
Q1 2025 ReportPublished: Apr 23, 2025
Earnings Highlights
Revenue of $19.34B down 9.2% year-over-year
EPS of $0.12 decreased by 64.9% from previous year
Gross margin of 16.3%
Net income of 409.00M
""The future of the company is fundamentally based on large-scale autonomous cars and large-scale, large volume, vast numbers of autonomous humanoid robots... I continue to believe that Tesla, with excellent execution, will be the most valuable company in the world by far."" - Elon Musk
Tesla Inc (TSLA) Q1 2025 Results: Adjusting to Challenges with Long-Term Optimism
Executive Summary
In Q1 2025, Tesla Inc (TSLA) reported revenues of $19.34 billion, reflecting a 9.23% year-over-year decline and a 24.79% drop from the previous quarter. Profitability faced substantial pressure as the company navigated multiple challenges including factory updates and overall sector headwinds. Gross profit stood at $3.15 billion with a net income of $409 million, both indicative of the challenges within the automotive manufacturing landscape. CEO Elon Musk highlighted the ongoing efforts towards localization in the supply chain as well as the anticipated rollout of autonomy features in the coming months as critical to driving future growth.
**Net Income:** $409 million (QoQ: -82.64%, YoY: -63.77%)
**EPS:** $0.13 (Diluted: $0.12)
**Operating Income Margin:** 2.06% (Reduced significantly from previous periods due to rising costs and declining sales).
**Operational Metrics:**
Financial Highlights
Financial Performance Overview:
- Revenue: $19.34 billion (QoQ: -24.79%, YoY: -9.23%)
- Gross Profit: $3.15 billion (QoQ: -24.55%, YoY: -14.69%)
- Net Income: $409 million (QoQ: -82.64%, YoY: -63.77%)
- EPS: $0.13 (Diluted: $0.12)
- Operating Income Margin: 2.06% (Reduced significantly from previous periods due to rising costs and declining sales). Operational Metrics:
- Current Ratio: 1.996
- Return on Equity (ROE): 0.00548
- Free Cash Flow: $664 million Management Insights: Management acknowledged challenges stemming from factory updates and reduced vehicle deliveries, while also expressing confidence in future growth avenues, particularly through robotaxi and energy solutions.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
19.34B
-9.23%
-24.79%
Gross Profit
3.15B
-14.69%
-24.55%
Operating Income
399.00M
-65.93%
-74.79%
Net Income
409.00M
-63.77%
-82.64%
EPS
0.13
-64.86%
-81.94%
Key Financial Ratios
currentRatio
2
grossProfitMargin
16.3%
operatingProfitMargin
2.06%
netProfitMargin
2.12%
returnOnAssets
0.33%
returnOnEquity
0.55%
debtEquityRatio
0.18
operatingCashFlowPerShare
$0.67
freeCashFlowPerShare
$0.21
priceToBookRatio
11.17
priceEarningsRatio
509.77
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Management Themes: 1. Future of Automation: Elon Musk expressed significant optimism regarding the rollout of autonomous technology, particularly the Model Y's robotaxi capabilities, which are expected to launch in Austin in June 2025. He stated, "Once it does start to move the financial needle in a significant way, it will really go exponential from there." 2. Supply Chain Localization: The strategy to localize supply chains has positioned Tesla favorably against competitors, reducing tariff risks. Musk noted, "We are... the least affected car company with respect to tariffs, at least in most respects." 3. Challenges and Resilience: The management acknowledged ongoing challenges, citing the adverse impact of seasonal sales trends and production changes on vehicle deliveries, expressing that "there will probably be some unexpected bumps this year," yet indicated confidence in overcoming these obstacles.
"The future of the company is fundamentally based on large-scale autonomous cars and large-scale, large volume, vast numbers of autonomous humanoid robots... I continue to believe that Tesla, with excellent execution, will be the most valuable company in the world by far."
— Elon Musk
"We expect to have these -- be selling fully autonomous rides in June in Austin... it will really go exponential from there."
— Elon Musk
Forward Guidance
While Q1 exhibited challenges, management remains optimistic about the future. The focus on robotaxis and energy products like the Megapack is expected to drive revenue growth beyond the current quarter. The strategy involves an increase in vehicle production efficiency and the anticipated scaling of autonomous technologies by mid-2026. Investors should monitor production progress and regulatory developments as critical indicators of operational resilience and market performance.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
TSLA Focus
16.31%
2.06%
0.55%
509.77%
XPEV
12.90%
-25.10%
-3.89%
-9.67%
LI
20.60%
-2.28%
0.97%
92.78%
RIVN
16.60%
-52.80%
-8.76%
-6.49%
LCID
-97.20%
-2.94%
-11.50%
-5.02%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Given Tesla's long-term vision propelled by automation and energy solutions alongside a strong balance sheet, the outlook remains optimistic despite current headwinds. Investors should weigh short-term operational challenges against the potential long-term benefits emerging from autonomous technologies and international market expansion. The anticipated recovery of margins and revenue stabilization in H2 2025 provides a compelling case for investment, particularly if management can navigate regulatory and competitive pressures effectively.
Key Investment Factors
Growth Potential
Tesla's investment in automation and expansion into autonomous vehicle markets presents significant growth potential. The forecasted launch of the robotaxi service and increased energy storage sales positioned for growth suggest robust avenues for revenue expansion in the coming years.
Profitability Risk
The primary risks include uncertainty surrounding macroeconomic factors, supply chain dependencies particularly regarding tariffs, and execution risks related to the rollout of advanced autonomous features. Additionally, brand perception issues and competitive market dynamics pose challenges.
Financial Position
Tesla maintains a strong balance sheet with $16.35 billion in cash and short-term investments, although increasing operational expenses and a declining cash flow coverage ratio indicate operational pressures that may need to be managed in the coming quarters.
SWOT Analysis
Strengths
Strong brand recognition and market positioning as a leader in electric vehicles.
Innovative technology advancements in autonomous driving and energy storage solutions.