🚖 Tesla: The Great Slump
As sales fall, the future rides on autonomy
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⚡ Tesla's growth story is hitting a roadblock.
The EV maker just posted its worst quarter in nearly three years. Deliveries are down. Market share is slipping fast.
Global deliveries fell 13% Y/Y in Q1 as the Model Y redesign collided with political backlash and growing consumer fatigue. That’s especially striking in a BEV market estimated to have grown over 20% in the same period.
Chinese rivals like BYD are surging. In Europe, Tesla registrations dropped over 40%. And Wall Street is losing patience—TSLA is down 50% from its peak.
Tesla’s valuation has always been about the future.
But its present has rarely looked more bleak.
Elon Musk is betting big on autonomy and AI to reverse the slide. But with the core business under pressure, the need for real-world progress has never been greater.
Let’s break down what we learned from the quarter.
Today at a glance:
Tesla Q1 FY25.
Brand erosion, by the numbers.
Key quotes from the earnings call.
Optimus robot and Cybercab updates.
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1. Tesla Q1 FY25
Tesla's revenue comes from three primary sources:
🚗 Automotive: Revenue from selling electric vehicles, including models S, 3, X, Y, and the Cybertruck (73% of revenue).
🌞 Energy Generation and Storage: Revenue from solar products and energy storage solutions, like Solar Roof and Powerwall (14% of revenue).
🔌 Services and Other: Revenue from vehicle service, Supercharger network, and sales of automotive parts and accessories (13% of revenue).
Q1 FY25 Key metrics:
Deliveries -13% Y/Y to 337K vehicles, a 40K miss and worse results in 2 years.
Production -16% Y/Y to 363K vehicles, lowest since Q2 2022 due to the Model Y transition.
Auto sales have declined despite price cuts and financing offers in the past two years. Tesla built 26K more vehicles than it sold, raising inventory concerns and the risk of further price cuts.
Income statement:
Revenue -9% Y/Y to $19.3 billion ($2.1 billion miss).
Gross margin 16% (-1pp Y/Y).
Operating margin 2% (-3pp Y/Y).
Non-GAAP EPS $0.27 ($0.15 miss).
Auto revenue fell 20% Y/Y—the steepest decline in years—while energy revenue surged 67%, highlighting the growing importance of Tesla’s non-auto segments.
Gross margin trends:
Auto: 12.5% (excluding credits), down from 14% in Q4 and 16% a year ago.
Energy: 29%, the highest margin segment, though below the Q3 peak.
Services and Other: 4%, the 12th consecutive profitable quarter.
Tesla’s historically strong margins have been supported by: gigafactory scale, direct-to-consumer sales, and minimal marketing costs. But those advantages are being eroded by aggressive price cuts, rising competition, and shifting demand.