Tesla has just published its worst quarterly results over the years. Net profit plunged 71% to $ 409 million in the first quarter.
Automotive sales fell 20%, and world deliveries took a hit, fell 22% in China and 62% amazing in Germany, two of Tesla’s largest markets. Even in California, the company’s original reception base, the EV market share increased from 56% to 44%.
For months, institutional investors have blamed Tesla’s problems on CEO Elon Musk, who spent a large part of his time in politics. During a call for investors on April 22, Musk tacitly recognized the problem, promising that “his time allowance at Doge will drop considerably”, referring to his government ministry.
Since the inauguration of President Trump, the Musk campaign to eliminate government waste has become a partisan show, leading to mass demonstrations and even leading to vandalism among Tesla dealerships. Many buyers have avoided the brand in response to the increasingly polarizing profile of Musk.
On the right side, Tesla’s energy storage activity jumped 67% in the first quarter, the income from the software subcription increases and a launch of June is planned for a Robotaxi fleet as well as a cheaper model.
But the financial benefits are austere. The operating margin of the company based in Austin, Texas, slipped to 2.1%, against 5.5% a year ago. Tesla has also missed profuse expectations, declaring only 27 cents per share against the 41 cents that analysts had provided.
Eighty-five percent of the investors interviewed by Morgan Stanley in March said that Musk’s political activities had damaged Tesla’s reputation and that they hoped for a turnaround.
“Essentially, it was a deactivated ramp for Musk out of Trump’s White House in our opinion,” said Wedbush analyst Dan Ives, in a note to investors, “like the brand’s world damage, the political storm and perfect storm chaos in recent months will now end in advance.”
Trump, on the other hand, said he wanted to “keep Elon for a long time”. Others in Washington may not share the same feeling. The time of Musk in Doge would have been filled with animated confrontations with members of the cabinet, notably the secretary of the Treasury Scott Bessent, the Secretary of State Marco Rubio, the Secretary of Transports Sean Duffy and the commercial advisor Peter Navarro.