Tesla’s profits and automotive revenues plunged at the beginning of the year, as sales slumped and the brand faced backlash against boss Elon Musk’s political activities.
The company warned investors that the pain could continue, declining to offer a growth forecast while saying “changing political sentiment” could meaningfully hurt demand.
The acknowledgement came as the firm reported a 20% drop in automotive revenue in the first three months of 2025 compared to the same period last year, while profits fell more than 70%.
The recent reversal of the company’s fortunes comes amid outcry over Musk’s role in the Trump administration, which he has acknowledged has taken his focus off the company.
Musk contributed more than a quarter of a billion dollars towards President Donald Trump’s reelection campaign.
He has also headed up Trump’s Department of Government Efficiency (DOGE) initiative to cut federal spending and slash the government workforce.
Musk’s controversial political involvement has sparked protests and boycotts of Tesla around the world.
Tesla on Tuesday said it had brought in $19.3bn (£14.5bn) in total revenue in the quarter, down 9% year-on-year.
That was less than the $21.1bn expected by analysts, and came as the company cut prices in a bid to woo buyers.
Trump’s tariffs on China also weighed heavily on Tesla, the company indicated.
Although the vehicles Tesla sells in its home market are assembled in the US, it depends on many parts made in China.
It said “rapidly evolving trade policy” could hurt its supply chain and raise costs.
“This dynamic, along with changing political sentiment, could have a meaningful impact on demand for our products in the near-term,” it said.
Tesla said artificial intelligence would contribute to future growth.
But investors have been unconvinced by such arguments in the past.
Shares in the company had shed about 37% of their value this year, as of market close on Tuesday. They were steady in after-hours trading following the results.
Dan Coatsworth, investment analyst at AJ Bell, said expectations were “rock-bottom” after the company said earlier this month that the number of cars sold in the quarter had fallen 13%, to their lowest level in three years.
He said the firm was facing fierce competition and warned that potential disruption to global supply chains as a result of Trump’s trade war also creates risks.
“Tesla’s problems are mounting,” he said.
