Tesla (NASDAQ:TSLA) is once again at a crossroads after a brutal Q1 2025 earnings miss. CEO Elon Musk has faced a lot of criticism from shareholders due to his political distractions and the massive underperformance that has resulted large because of it. Still, he has now pledged to shift his attention back to the company.
Surprisingly, TSLA stock itself didn’t crater on the bad earnings. The stock went up by around 4% post-market despite profits being down more than 71% and deliveries at their lowest since mid-2022. Can Musk’s renewed focus reverse Tesla’s fortunes?
Tesla’s Q1 2025 results were a significant disappointment by almost every metric. The company’s revenue fell 9% to $19.34 billion, which fell short of the $21.35 billion Wall Street consensus. Funnily enough, that “consensus” is something even Tesla bulls doubted. Most investors saw a big miss coming.
Net income also fell 71% to just $409 million, with adjusted EPS at $0.27 and far below consensus forecasts of $0.41 to $0.44. The main culprit was a steep drop in vehicle deliveries, which fell to 336,681 units. It is down 13% year-over-year and more than 32% from the previous quarter. Analysts expected around 50,000 more deliveries.
Elon Musk did manage to convince shareholders not to sell en masse. His new strategy will see him dedicating just one or two days a week to government affairs, with the rest of his time spent on Tesla’s operations and product roadmap.
He’s also trying to shift the brand from an EV-maker to a cutting-edge robotics and AI company. Unfortunately, I’d sell TSLA stock. The Optimus robot remains far from commercial viability and relies heavily on remote human control. The robotaxi vision faces steep hurdles, and the lofty valuation is built on unproven future businesses. In the meantime, the core EV segment is being shredded.
