”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.”
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Overview
In a quarterly earnings call that oscillated between brutal financial reality and near-futuristic ambition, Tesla’s Q1 2025 performance drew a stark line between what is—and what might be. With missed revenue targets, dramatic drops in profitability, and questions about Elon Musk’s focus, Tesla finds itself navigating the friction between a struggling present and a promised future.
For the most part the headline numbers came in with misses, as expected and in the short term, I expect more pain. What I can say with confidence, is that this was an awful quarter. Worse than I expected. I am actually leaning to reducing my exposure to the company over the short term as the high comps fade out.
You can find the full earnings deck release here.
Highlights and Summary
Missed revenue estimate with $19.34B under $21.27B – (-34.09%)
Missed EPS estimate with $0.27 over $0.41 – (-9.10%)
Energy generation and storage fell, which I strongly dislike. YoY it’s up but from the prior quarter, the picture isn’t as rosy, signalling a decline in a primarily growth driver for the business. Comps over the next few quarters are going to be very challenging too and potentially negative. Services and other revenue also has the same worry. Probably out of the entire earnings report, this is my biggest worry. The question at this point isn’t if things will be bad, but how bad will they get?
Over all the auto related numbers make sense and align with Tesla’s plan for the next 5 years, so It’s hard to be too mad at them. After all, I’m personally not too excited by just the auto part of the business and I want them pushing more and more products out with aggressive ramps.
Updated Vizual Summary Charts
Key Charts
Here’s what I like:
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•P
Here’s what I don’t like:
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• S
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•A
•V
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Estimates and Guidance
Analysts seem to be expecting a steady uptrend in most metrics as the above image shows.
Activity
Short interest has been dropping nicely for some time. Despite all the bears out there moaning about the stock being expensive and a dead company, there certainly isn’t much interest in putting ones money where ones mouth is. This data is lagging so could be higher, unless all the Tesla haters aren’t brave enough to short it.
Institutional ownership continues to hold, so whilst retail seems to be convinced this is a company in trouble, for now the big boys don’t agree.
Bonus Section – A couple of things I’m gassed about. The jokes a little on the nose I know!
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• U
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Conclusion
Tesla’s Q1 2025 results reveal a company caught between turbulence and transformation. Financial fundamentals are deteriorating—but so are those of legacy automakers. What sets Tesla apart is its relentless pursuit of a new industrial paradigm, one built around AI, autonomy, and vertical integration. The stakes have never been higher. If Musk’s vision materializes, Tesla could become the most important technology company of the 21st century. If it fails, it may become a cautionary tale of ambition unmoored from execution. The next two quarters will be critical—not just to validate new technologies, but to prove that Tesla can scale them faster, cheaper, and smarter than anyone else..
I am NOT invested in Tesla for a short 1 to 2 year hold. I invest in them because some of the seeds they have been planting have INSANE potential to be hugely profitable products in their own right, for many years to come. Far more so than the car segment as a standalone. It is impossible to put a price on some of this, even the best models seem to generate crazy numbers. Personally I stick to adding in energy, service expansion and FSD. Even the numbers I see for those segments make me feel like I have a steal deal on my hands, even at these prices.
Will Tesla struggle a little to get there? More than likely. The company will take two steps forward and one step back on it’s journey as it transitions into this next phase of it’s evolution. I’m more than happy to capitalise on the volatility of the stock price in the mean time, by adding and trimming my position as price moves.
