Tesla’s Quarterly Revenue Drops for First Time in Four Years, Company Announces Cost Cutting Measures
Tesla, the electric carmaker founded by Elon Musk, has reported a drop in quarterly revenue for the first time in almost four years. According to the company’s financial result filings, Tesla achieved revenues of $21.3bn in the first quarter of the year, a 9% decrease from the $23.3bn reported in the same period last year.
Despite the decline in revenue, Tesla’s shares saw a 6% increase in after-hours trading following the announcement that the launch of new models would be accelerated from the second half of 2025. The company had previously disclosed a 9% decrease in vehicle deliveries, citing disruptions in shipping and an arson attack at a factory in Berlin as contributing factors.
In addition to these challenges, Tesla also acknowledged the pressure on global electric vehicle (EV) sales, as many carmakers prioritize hybrid vehicles over EVs. However, the company remains committed to its mission of promoting EV adoption and is taking steps to support its growth. These include increasing awareness and expanding vehicle financing programs, such as attractive leasing terms for customers.
Despite its efforts to reduce prices and attract buyers, Tesla has faced strong competition, particularly from China, where competitors are undercutting its prices. The company has also been criticized for not having a low-budget model, with plans for its cheapest model to date being dropped.
In an effort to address these challenges, Tesla has implemented cost-cutting measures, including a program of job cuts that resulted in 15,000 layoffs, representing more than 10% of its total workforce. The company acknowledged that this may result in achieving less cost reduction than previously expected, but it will enable Tesla to grow its vehicle volumes in a more capex efficient manner during uncertain times.
These cost-saving measures may also help address concerns about quality control, as some customers have reported basic defects with their Tesla vehicles. In fact, the company recently faced negative press when regulators announced a recall of over 3,700 Cybertrucks due to concerns about the accelerator pedal becoming stuck. This issue has been linked to a simple covering on the pedal itself.
Despite these challenges, Tesla remains the world’s most valuable carmaker by market capitalization. However, analysts have raised concerns about Musk’s ability to manage his time across his extensive interests, including Tesla, X, and SpaceX. With the company facing pressure to meet demand and maintain profitability, all eyes will be on Tesla’s future vehicle line-up and its ability to navigate the ever-changing landscape of the EV industry.
