Tesla’s profits plummet by 71% — Musk is in turmoil, but in no hurry to leave DOGE

Tesla is reaping the rewards of Elon Musk’s foray into politics and his «heartfelt greetings» antics. Many potential buyers do not want to be associated with all this, and they avoid buying Tesla electric cars. The consequences are very telling. The company’s sales have dropped so much that it is close to the financial «red zone» — worst situation in recent years.

In the first quarter of 2025, Tesla sold almost 337 thousand electric vehicles and received $19.3 billion in revenue. However, the net profit amounted to only $409 million. This is 71% less than in the same period last year. Although a year ago, Tesla’s financial results were not too rosy either. In the first quarter of 2024, profits fell by 55% to $1.13 billion due to a massive decline in electric vehicle prices and other unexpected difficulties.

In terms of deliveries, it was the worst quarter in two and a half years. Moreover, it was the first time in the company’s history that sales declined annually. Tesla was able to stay afloat only thanks to the sale of «green» tax credits (bonuses from the government that can be resold to other manufacturers) worth $595 million. Without them, the company would have made a loss.

Tesla says it is taking measures to stabilize the situation in the medium and long term, but it is not yet sure whether it will be able to increase sales this year.

To be fair, it is not only Elon Musk’s excessive political activity that is dragging the company down. The decline in demand may also be influenced by an outdated model range and the failed launch of the new Cybertruck, which literally crumbles while drivingand the external elements after the recall are attached with a sealant.

To remedy the situation, the company plans to release a new, more affordable model. Its production is scheduled to begin in June 2025. The new car will use elements of the next-generation platform (like Robotaxi), but will be based on the same platform as the Model 3 and Model Y. Accordingly, the new model will be produced on the same lines as the current line of cars.

Perhaps Elon Musk has also realized that his political career is harming his business. Earlier, there were rumors that he might leave his position in the so-called Department of Government Efficiency (DOGE) in May.

Later, he clarified that he did not plan to leave the Department entirely, and might stay until the end of President Donald Trump’s second term. However, Musk intends to pay more attention to Tesla and reduce his role in DOGE once the work is established.

Not stepping down, just reducing time allocation now that @DOGE is established

— Elon Musk (@elonmusk) April 23, 2025

In any case, we can see Tesla’s decline now. While Demand for electric vehicles is growing globally, in the American company sales are decliningand already manufactured Cybertruck vehicles have to be used as a marketing platform for other models. And there is still the impact of Trump’s new tariffs to come.