Musk Assures Tesla’s Survival Despite Operating Margin Drop to 2%
Tesla managed to maintain profitability in the first quarter of 2025, albeit narrowly. The automaker recently reported significant declines in both production and delivery numbers due to CEO Elon Musk’s involvement in the Trump administration, global trade tensions, and an aging product lineup. These factors manifested in the profit and loss statement for Q1 2025.
Total revenues decreased by nine percent compared to the previous year, reaching $19.3 billion in Q1. Automotive sales, which constitute 72 percent of Tesla’s revenue, saw a 20 percent year-over-year decline. However, Tesla’s storage battery and solar division experienced substantial growth, up 67 percent, and service revenues, including Supercharger stations now accessible to other brands, increased by 15 percent.
Despite this, Tesla’s expenses slightly rose in Q1 2025, leading to a significant drop in profitability. Operating income plummeted two-thirds to $399 million, and the operating margin, once as high as 20 percent, fell to a mere 2.1 percent. This marks the third consecutive quarterly decline, raising concerns that the company might start losing money on each car sold if the trend persists.
(Source: Ars Technica)
