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Tesla's Profits Plummet Amidst Falling Demand and Criticism Towards Musk

Tesla reported that its profit in the first quarter of 2025 amounted to $409 million compared to $1.4 billion in the same period last year

Tesla's Profits Plummet Amidst Falling Demand and Criticism Towards Musk

Tesla's financial results for the first three months of 2025 were weaker than a year earlier. The company earned $409 million compared to $1.4 billion received in the same period in 2024.

Reasons for Sales Decline

Analysts associate the drop in revenue with several factors:

  1. Increased competition from Chinese automakers.
  2. Lack of new models in the brand's lineup.
  3. Elon Musk's public stance, which experts believe affected the loyalty of part of the audience.

Despite this, Tesla retains the status of the most capitalized car company in the world and maintains its leadership in the electric vehicle market in the United States. However, since December 2024, its shares have fallen by almost 50%, reflecting growing investor concerns.

Despite this, Tesla retains the status of the most capitalized car company in the world and maintains its leadership in the electric vehicle market in the United States.

Competitors are Closing In

According to The New York Times, Tesla is gradually losing ground not only to Chinese brands but also to traditional auto giants — GM, Volkswagen, and Hyundai, which are actively developing their electric vehicle lines.

"Tesla is losing market share to Chinese brands and big auto concerns like GM, Volkswagen, and Hyundai, which are actively promoting their electric vehicles", the article states.

Previously, the company had set an ambitious goal to achieve annual sales of 20 million cars by 2030. However, after a record 1.8 million vehicles in 2023, a decline followed: 1.7 million sold in 2024, and in the first quarter of 2025, the drop was 13% year-on-year.

Issues with New Offerings

Cybertruck, Tesla's latest offering, failed to meet expectations: at the beginning of 2025, demand for it fell nearly in half compared to the previous quarter.

Cybertruck, Tesla's latest offering, failed to meet expectations: at the beginning of 2025, demand for it fell nearly in half compared to the previous quarter. To stimulate sales, the company offered discounts of up to $8,500 at a starting price of $70,000 without incentives.

Additionally, Tesla announced a more affordable model expected to be available for purchase by the end of June. However, details remain undisclosed — not even a prototype. This raises doubts about meeting deadlines. It's unclear whether it will be a completely new vehicle or a budget version of the Model 3/Y.

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