The company’s financial results, released today, show a significant decline in net income by 71% to $409 million, alongside a nine percent drop in sales to $19.33 billion. Industry analysts consolidated by FactSet had anticipated figures of $1.44 billion and $21.13 billion, respectively.
These disappointing results come as the company endures the repercussions of Musk’s involvement in the Trump administration, where he leads a department known as Government Efficiency. This role has been associated with substantial layoffs, as well as Musk’s support for far-right movements in Europe.
Tesla shares have fallen over 40% this year.
A conference call with investors is expected to be held by the company later today.
It is anticipated that Tesla will introduce a more affordable version of its best-selling Model Y SUV this year, with plans to launch a driverless robotaxi service in Austin, Texas, by June.
Meanwhile, the electric vehicle leader is facing significant competition for the first time.
Earlier this year, Chinese electric car manufacturer BYD announced the development of an electric battery charging system capable of fully charging a vehicle in minutes.
Additionally, Tesla’s European competitors have started to offer new models with advanced technology, providing a viable alternative to Musk’s cars as public opinion in Europe turns against him.
On another note, investors believe that Tesla may be less affected by Trump’s tariffs than other automakers because most of its vehicles are produced in the U.S. However, it is not entirely immune, as some materials are imported and will become more expensive.
Furthermore, there is concern about retaliation from China, as it has stopped accepting orders from Chinese customers for the Model S and Model X. The Tesla factory in Shanghai manufactures the Model Y and 3 for the Chinese market.
