Tesla reported a significant miss on Wall Street's revenue and earnings expectations for Q1 2025. Total revenues decreased by 9% year-over-year to $19.34 billion, while net income attributable to common stockholders plummeted 71% to $409 million.
The company's automotive sales revenue declined by 21%, primarily due to a planned, industry-first simultaneous changeover of production lines across all factories for the New Model Y, resulting in several weeks of lost production. Vehicle deliveries also dropped by 13%.
Automotive gross margin compressed to 16.2% from 18.5% in the prior year. Management attributed the miss to these factory upgrades and tariff headwinds, indicating operational challenges and external pressures impacting profitability.
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