Tesla (TSLA) Q1 2025 earnings results and conference call transcript
Tesla's Q1 2025 earnings release is out. Here are all of the details from the quarter.
Tesla is out with its Q1 2025 earnings results, and the stock is moving in after-hours trading. The EV maker reported earnings-per-share of $0.27/share and revenues of $19.335 billion, missing analysts' EPS expectation of $0.39/share and estimated revenue of $21.11 billion.
Listen to the Tesla (TSLA) Q1 2025 earnings call
Tesla (TSLA) Q1 2025 Earnings Release
Check out the full TSLA Q1 2025 earnings report on the Tesla Investor Relations website.
Highlights
Profitability
- $0.4 billion GAAP operating income
- $0.4 billion net income
- $0.9 billion non-GAAP net income
Cash
- Operating cash flow of $2.2 billion
- Free cash flow of $0.7 billion
- $0.4 billion increase in our cash an investments to $37.0 billion
Operations
- New Model Y ramp outpacing all past ramps
- Megafactory Shanghai produced > 100 Megapacks
- Model 3, Model Y, and Cybertruck now drive autonomously from production line to outbound lots in Fremont and Gigafactory Texas.
Summary
In Q1, we accomplished an industry first: simultaneously changing over production lines across all factories for the world’s best-selling vehicle4 – the Model Y. The Tesla team successfully ramped our production lines across four factories while managing supply chains across three continents without any major disruptions, demonstrating the advancement of our operational and supply chain management capabilities.
AI is a major pillar of growth for Tesla and the broader economy and key to our pursuit of sustainable abundance. Furthermore, AI infrastructure is driving rapid load growth, which, along with traditional utility customer applications, is creating an outsized opportunity for our Energy storage products to stabilize the grid, shift energy when it is needed most and provide additional power capacity. While the current tariff landscape will have a relatively larger impact on our Energy business compared to automotive, we are 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. This dynamic, along with changing political sentiment, could have a meaningful impact on demand for our products in the near-term. We remain committed to expanding our business model to include delivering autonomous robots across multiple form factors and use cases – powered by our real-world AI expertise – to our customers and for use in our factories, as we navigate these headwinds.
In the face of near-term profitability hurdles, the low-cost, localized manufacturing base that we have built provides advantages in delivering the best products at the right price to our customers globally. We continue to make critical, high-value investments while maintaining a strong balance sheet during this uncertain period.
Revenue - Total revenue decreased 9% YoY to $19.3B. YoY, revenue was impacted by the following items:
- decline in vehicle deliveries, in part due to the Model Y update across all four vehicle factories (-)
- reduced vehicle average selling price (ASP) (excl. FX impact), due to mix and sales incentives (-)
- negative FX impact of $0.3B (-)
- growth in Energy Generation and Storage and Services and Other (+)
- higher regulatory credit revenue (+)
Profitability - Our operating income decreased 66% YoY to $0.4B, resulting in a 2.1% operating margin. YoY, operating income was primarily impacted by the following items:
- reduced vehicle ASP (-)
- decline in vehicle deliveries (-)
- increase in operating expenses driven by AI and other R&D projects partially offset by a decrease in SG&A (-)
- growth in Energy Generation and Storage gross profit (+)
- lower cost associated with Cybertruck production ramp in Q1’24 (+)
- lower cost per vehicle, including lower raw material costs partially offset by lower fixed cost absorption primarily from Model Y production decrease YoY (+)
- higher regulatory credit revenue (+)
Cash - Quarter-end cash, cash equivalents and investments was $37.0B. The sequential increase of $0.4B was primarily the result of positive free cash flow of $0.7B.
Outlook
Volume
- It is difficult to measure the impacts of shifting global trade policy on the automotive and energy supply chains, our cost structure and demand for durable goods and related services. While we are making prudent investments that will set up both our vehicle and energy businesses for growth, the rate of growth this year will depend on a variety of factors, including the rate of acceleration of our autonomy efforts, production ramp at our factories and the broader macroeconomic environment. We will revisit our 2025 guidance in our Q2 update.
Cash
- We have sufficient liquidity to fund our product roadmap, long-term capacity expansion plans and other expenses. Furthermore, we will manage the business such that we maintain a strong balance sheet during this uncertain period.
Profit
- While we continue to execute on innovations to reduce the cost of manufacturing and operations, over time, we expect our hardware-related profits to be accompanied by an acceleration of AI, software and fleet-based profits.
Product
- Plans for new vehicles, including more affordable models, remain on track for start of production in the first half of 2025. These vehicles will utilize aspects of the next generation platform as well as aspects of our current platforms and will be produced on the same manufacturing lines as our current vehicle lineup.
- This approach will result in achieving less cost reduction than previously expected but enables us to prudently grow our vehicle volumes in a more capex efficient manner during uncertain times. This should help us fully utilize our current expected maximum capacity of close to three million vehicles, enabling more than 60% growth over 2024 production before investing in new manufacturing lines.
- Our purpose-built Robotaxi product – Cybercab – will continue to pursue a revolutionary “unboxed” manufacturing strategy and is scheduled for volume production starting in 2026.
Tesla (TSLA) Q1 2025 Earnings News Highlights
Check out all of our Tesla news coverage:
- Tesla (TSLA) Q1 2025 earnings results miss EPS & revenue expectations
- Listen to Tesla's (TSLA) Q1 2025 earnings call here
- Tesla (TSLA) says the trade war & politics could create 'a meaningful impact on demand' for its EVs
- Tesla (TSLA) Q1 2025 automotive revenues declined 20% from a year ago
- Elon Musk says he'll be less involved in Department of Government Efficiency (DOGE) starting in May
Tesla (TSLA) Q1 2025 conference call transcript
Tesla's earnings results conference call is set to kick off at 5:30 p.m. ET. Keep an eye on this article for a transcription of the earnings call right here.
- Tesla call starts at 5:35 p.m.
- Elon starts with a statement saying he will be less involved with DOGE starting in May 2025
- "There will be a few bumps along the road"
- "We expect to be selling fully autonomous rides in Austin in 2025"
- Encourages people to focus on the long-term of Tesla.
- Working on their supply chain issues
- Says Tesla is the least-affected company with respects to tariffs
- Tariffs are still tough on a company when margins are still low
- Localized supply chains mitigates the headwinds
- Puts Tesla in a strong position compared to its competitors
- Musk says the tariff decisions are up to the president
- Shifts focus to the future of Tesla
- Talking autonomy again
- Predicts 1 million Optimus robots made per year by 2029 or 2030
- Touts strong Megapack demand and the performance of the energy storage division
- Expect stationary energy storage to scale to terawatts per year in the future
- First quarters are usually the worst quarter of the year and are tricky
- Touts Model Y as the best-selling vehicle, and congratulates the Tesla team on transitioning all Model Y lines
- Despite industry headwinds, the future of Tesla is bright according to Musk
- "I like this phrase 'sustainable abundance for all'"
- What's the happiest future you can imagine?
- Closest thing to heaven we can get on Earth, basically
- Reiterates plan to lead the Tesla team going forward
- CFO talking now
- Updating the factory lines was not a small feat
- We are not aware of any company able to revamp their best-selling product line as fast
- Record gross profit for the energy storage division
- CFO claims the line limited supply of Model Y
- CFO says vandalism affected demand
- CFO says FSD has to be experienced
- Auto margins declined primarily due to the drop in deliveries and factory changeovers
- Lower tax credits as well
- Touts storage performance
- Powerwall is supply constrained
- Decline Other Income was impacted by Bitcoin drop and foreign exchange
- Expect increased volatility in Other Income because of Bitcoin holding
- We've been on the regionalization journey for years at Tesla
- Most American-made cars
- Today, 85% USMCA compliant vehicle lineup
- We are not immune to tariffs
- The inclusion of Canada and Mexico will have an impact on marketability
- In the process of moving battery cell supply away from China
- working on securing non-China based suppliers
- Megapack factory in China just began operations in Q1, should take care of our business outside of the U.S.
- Current trade environment, the expense is bringing in equipment from China
- Thanks employees and customers
- Investor questions begin
- What are the highest risk items on the critical path to Robotaxi's launch?
- Elon - fully autonomous Teslas in June 2025 will be Model Y vehicles
- To be in many other cities in the U.S. by the end of this year
- Difficult to predict the exact ramp of Cybercab
- S curve that makes the tipping point hard to nail down
- Large scale autonomy certainly by the middle of 2026
- Millions of Teslas operating with full autonomy by the middle of next year
- There will be a localized parameter set for places that have snow
- There is some value to having a localized set of parameters for different regions and localities
- Compares the digital neural net to human driving experience
- Self-driving validation is happening in the background
- Very basic terms, if you are seeing an accident every 10,000 miles, you need to drive 10,000 miles to test that. - Elon
- There are convoys of FSD Teslas driving around Austin to test out autonomy
- The Chinese consumer might just be having more fun with the cars
- Example of driving a car across a mountain dirt road in FSD
- It's worth noting that the Tesla gigafactory is bigger than the Pentagon... - Elon
- When will FSD unsupervised be available on personal cars?
- Elon - within the U.S. by the end of the year
- At Tesla we are absolutely focused on safety
- We want autonomy to be definitively safer than manual driving
- Wwe want to be cautious with the roll out
- With that said, I think we should be able to have it work in several cities later this year for personal use
- Go to sleep in your car and wake up at your destination by the end of the year - Elon
- New product ramp slower?
- Nothing is blocking us from production
- Full utilization of our factories is a focus of our new products
- Low cost of ownership is a focus for new products
- Does Tesla see Robotaxi as a winner take most market? How do you view Waymo as a competitor?
- Elon - The issue with Waymo cars is that they cost WAY MORE money...
- UGH, Horrible Dad joke, Elon.
- Elon says vision and audio are better than Waymo's sensors
- I don't see anyone being able to compete with Tesla at present - Elon Musk
- Tesla will have 90-something percent of the FSD market
- If we have millions of cars deployed by next year, unless we are blocked by regulators
- We are not just the software solution
- We are the cars too, which gives Tesla a leg up vs autonomy competitors
- The car our customers have today will be autonomous
- The first Model Y will drive itself from the factory all the way to a customer with FSD by the end of the year
- Update on Unboxed method?
- It's progressing
- Basis for the Cybercab low cost manufacturing process
- You will see them in a few months on test roads
- Musk calls it a revolutionary manufacturing process
- Profound reimaging of how to make cars
- The factory is the product as much as the car is the product
- How is Tesla positioning itself to deal with the global trade war and tariffs?
- CFO talks about regionalization
- 85% of NA vehicles are locally sourced
- Working on regionalizing the battery
- We aren't planting rubber trees yet - Elon
- Mentions the Texas lithium refinery
- And the cathode refinery
- Figuring out the anode supply
- Lists all the battery components
- There is not another vehicle company that is building lithium and cathode refineries
- We also make our own cells - Musk
- There are entire companies that only produce cells
- Our cell production is going quite well
- We're at the lowest cost per kilowatt hour for vehicles - Musk
- The plan this year is to build off of that base
- Relatively easy to build something at high volume and low cost is super difficult
- Does Tesla currently have a battery supply constraint? How is that impacted by tariffs?
- Working on moving the battery supply upstream
- We are not battery supply constrained for EV production
- Did Tesla experience any meaningful decrease in orders in Q1 as a result of Elon?
- Answers about production...
- Tesla remained the best-selling car in Q1 in America
- Interest remains high, based on test drives
- Elon - Tesla is not immune to the macro demand for cars
- When there is economic uncertainty, people try to avoid making large purchases
- That's why we focus on affordability
- Regarding Tesla Optimus pilot line, what is the current production rate? How will tariffs impact?
- Elon - Optimus is very much an in-development product
- We do expect to make a few thousand Optimus robots by the end of the year
- There is not an existing supply chain for Optimus robot
- Tesla AI computer is the same one from the car
- Optimus production will move as fast as the slowest part's supply
- Production ramp of a truly new product is hard to estimate
- You go through a series of constraints figuring out limiting factors
- Rate of production ramp is a function of solving supply constraint problems
- Optimus was affected by the magnet issues with Chinese tariffs
- China's rare earth elements policy is impacting Tesla
- Optimus' arm impacted
- I am confident we will overcome these issues by the end of the year
- Analyst questions begin
- Pierre at New Street
- Why are there so many people still buying other luxury cars? Are you trying to solve why are auto buyers missing about Model 3 and Model Y?
- In the future, most people are not going to buy cars - Elon Musk
- Elon proceeds to ramble about Nokia and flip phones
- In the not too distant future, buying a gasoline car that is not autonomous will be like riding a horse while using a flip phone
- Emmanuel from Wolfe
- Public FSD still has a decent amount of human interventions
- What's still required on the intervention front to be viable to regulators?
- Ashok - we are aware of the interventions, and that is why we are focused on all the issues we face here
- Focusing on Austin right now
- Along with other regulation issues
- Edison at DB
- Question about Optimus supply chain going forward
- What do you envision that supply chain looking like?
- How does one think about what needs to happen there?
- We'll have to see how things settle out. - Elon
- We are already taking a lot of steps to localize our supply chain
- Coming back to Robotaxi then, what will the scale be as it launches?
- We're still debating the amount of launch vehicles
- 10 autonomous Teslas at launch in Austin?
- George at Canaccord
- FSD pricing question
- Multi-tiered pricing approach?
- Can you read a text message or not? - Elon on FSD launch conditions
- Doesn't really answer the question
- Just says the value will be profound when FSD ships
- Geographic expansion?
- India FSD rollout?
- Tariffs in India are effectively 100% for foreign-made Tesla vehicles over there
- Very careful trying to figure out when is the right time
- It would be a great market to enter
- these kinds of things create a little bit of tension that we're trying to work around
- Adam Jonas at Morgan Stanley's mic didn't work, lol
- Wells Fargo guy is next
- Sticking with vision-only approach, people are concerned about sun glare, fog, and dust
- Elon claims it does not blind the camera
- Direct photon count
- A processed image goes through a digital signal processor
- The image that you see looks all washed out
- The first processing of the photon counting adds noise and washes things out
- Quite a big breakthrough Tesla made was to go to direct photon counting
- You can see while driving right into the sun or in pitch black night
- Claims it can handle fog
- Any color about the new product?
- Are they making a cheaper Model Y?
- Using existing lines is part of their strategy
- Lars - with the recent upgrades to the Model Y and Model 3 lines, our intention to make quality cars
- They will resemble existing cars in form and shape
- Adam Jonas, are you there, buddy?
- He's there!
- Asks a question about Joe Rogan when Elon suggested tariffs could break things. When would things start breaking if tariffs stay in place?
- Elon - I am one of many advisors to the president, and I am not the president.
- I have made my opinion clear to the president
- He talks to many people
- And he makes his decision
- I'm an advocate of predictable tariff structures and free trade/lower tariffs - Elon
- If some country is doing predatory things with tariffs, you have to do something to counteract that
- Case-by-case basis
- Between China and the United States, who is ahead in AI?
- I think you know the answer on drones - Elon
- Any country that cannot manufacture its own drones...
- America can't manufacture its own drones
- China manufactures nearly 70% of all drones
- China is in a very strong position
- Here in America, we need to invest more of our people and resources into manufacturing
- I think China is amazing
- America cannot build drones without access to Chinese parts
- No company in any country can match Tesla or SpaceX when it comes to robotics - Musk
- I am a little concerned that ranks 2-10 on the leaderboard will be Chinese companies
- Call comes to its merciful end at 7:02 PM.
This article is only meant for educational purposes, and should not be taken as investment advice. Please consider your own investment time horizon, risk tolerance, and consult with a financial advisor before acting on this information.
Full Disclosure:
At the time of this article, Shacknews primary shareholder Asif A. Khan, his family members, or his company Virtue LLC had the following positions:
Long Tesla via TSLA shares
Asif Khan
CEO/EIC/EIEIO
From The Chatty
-
Shacknews
replyAsif Khan posted a new article, Tesla (TSLA) Q1 2025 earnings results and conference call transcript
