A day before Tesla announced first-quarter earnings and revenue, analyst consensus was for the EV giant to see about 7% profit growth in 2025, even with disastrous Q1 vehicle deliveries already reported amid apparent "brand damage" associated with Chief Executive Elon Musk's close work with the Trump White House. TSLA edged up Thursday.
That all changed late Tuesday after Tesla announced first-quarter EPS fell 40% more than expected with auto revenue plunging 20%. Meanwhile, auto gross margins excluding regulatory tax credits came in around 12.5%, marking the lowest auto gross margins since Q2 2012 when Tesla delivered 5,612 vehicles.
While the stock market generally cheered Musk and the Tesla team for their performance on the Q1 earnings call, analysts hastily began slashing full-year earnings expectations late Tuesday and Wednesday.
The day before Tesla earnings, the consensus view was for 2025 EPS to grow 6.6% to $2.58. As of early Thursday, the consensus projection has dropped 15% to $2.20, according to FactSet. Analyst consensus is also down 28% since Q4 earnings.
The current expectation would mark a 9% decline vs. the originally reported $2.42 in 2024. If this view holds true, it would be Tesla's third consecutive annual profit decline. Analysts surmise the profit decrease could be due to general economic difficulties for the auto industry, brand damage associated with Musk's work with President Donald Trump and the decision by Tesla to release its "new affordable" vehicles as scaled-down cheaper versions of the Model Y and/or Model 3.
The move to not come out with a new model line could mean customers do not buy the more expensive Model Y or Model 3 variants and simply purchase the cheaper variants.
Tesla stock advanced 3.5% to 259.51 during Thursday's stock market action. Shares jumped as high as 259.45 intraday on Wednesday, closing up 5.4% to 250.74, as the general analyst consensus was positive coming out of the conference call late Tuesday.
TSLA popped 4.6% to 237.97 on Tuesday.
Tesla Changes Q4 Earnings
Meanwhile, Tesla also revised lower its Q4 2024 earnings to 60 cents per share, down 13 cents from the originally reported 73 cents per share, without an explanation. The lower Q4 EPS means 2024 earnings came in at $2.29 per share.
Using that number, the current 2025 EPS analyst consensus represents a 4% decrease.
In Q4, Tesla's net income was boosted by a recent change in how companies account for holdings of digital currencies. This policy change resulted in a net income increase of $600 million.
For Q1, Tesla reported its net income changed unfavorably by $562 million due to a $125 million mark-to-market loss on its bitcoin digital assets, according to the company's 10Q federal filing.
Tesla Q1 Earnings At A Glance
The EV giant reported that Q1 EPS sank 40% to 27 cents per share while revenue fell 9% to $19.335 billion. Musk brand damage appeared to take a toll on sales and the refreshed Model Y began rolling out late in the quarter. Tesla pulled its target for delivery growth in 2025.
Operating income was $399 million. But excluding regulatory credits of $595 million, Tesla had an operating loss.
Tesla, in its earnings statement, said a "pilot" robotaxi launch will take place in Austin in June. The company added that output will start by midyear for an "affordable" EV, with executives later saying that the cheaper EV line will "resemble" the Model Y or 3. Several reports earlier stated that the first cheap EV would be a stripped-down Model Y.
Musk, on the earnings call, said he'll scale back his work starting in May for the Trump White House at the Department of Governmental Efficiency (DOGE). However, he said he could still do government work a day or two a week.
Tesla Earnings Miss But Elon Musk Bullish On Robotaxis. June Launch Still On.
Tesla Stock Action
Shares jumped 5.3% on Wednesday despite grim Q1 earnings as Musk still sees a robotaxi launch in June. Meanwhile, other Magnificent Seven stocks had solid to strong gains as well Wednesday. However, Tesla stock and the other megacaps remain in downtrends, below key levels.
Wednesday night, President Trump said he will set new tariff rates on China in two to three weeks, but he also said if there's no China deal, it's "OK." Trump said he is not considering changes to auto tariffs, but added that he could raise auto tariffs on Canada.
Tesla stock is currently down about 48% from its 488.54 peak on Dec. 18. Prior to earnings, TSLA shares were trading back near their March low of 214.25 but have moved higher since then. Still, Tesla stock remains down 39% so far in 2025 as of April 23, one of the worst S&P 500 performers in 2025 stock market action.
Trump's Auto Tariffs Are Here. What Is Next For The U.S. Auto Industry?
Since Trump announced the 25% auto tariffs, the 32 stocks in the IBD Auto Manufacturers industry group collectively dropped around 13%. The group has declined around 37% in 2025. That puts the industry at 101 out of the 197 sectors tracked by IBD, with No. 1 the strongest and 197 the weakest sector.
Tesla stock has a 21-day average true range of 8.9%. The ATR metric is available on IBD's MarketSurge charting tool. It gauges the characteristic breadth of a stock's behavior. Stocks that tend to make large jumps or dives in daily action, the kind that can trigger sell rules and shake investors out of a stock, have a high ATR. Stocks that tend to make more incremental moves have lower ATRs.
In the current stock market, IBD suggests stocks with ATRs of 3% or below.
Tesla stock has a 64 Composite Rating out of a best-possible 99. Shares also have a 78 Relative Strength Rating and a 78 EPS Rating.
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