Tesla’s start to 2025 has been anything but smooth. Sales are sliding, profits are plunging, and even loyal fans are starting to worry. Underneath Elon Musk’s optimistic public statements, the numbers tell a far harsher story.

Here's a deeper look at the crisis Tesla is facing.

The Vanishing Bottom Line

Tesla's net income collapsed by 71%, from $1.39 billion a year ago to just $409 million this quarter. Automotive revenue also tumbled 20% to $14 billion. Without the sale of $595 million in regulatory credits to other automakers, Tesla would have actually posted a loss. As government policy shifts, even that lifeline could soon disappear.

Profit Margins Shrink to 2012 Levels

At its peak in 2022, Tesla boasted a 30% automotive profit margin, the highest among major automakers. But this quarter, that number shrank to just 12.5%—a figure Tesla hasn’t seen since 2012, when it was barely delivering 5,600 cars per year. Rising costs, price cuts, and competition are squeezing profits harder than ever.

Falling Sales, Fading Dominance

For the first time in its history, Tesla saw an annual decline in vehicle deliveries, with a 13% drop to 336,681 units. Sales are falling even as overall EV demand grows in key markets like China and Europe. Rivals like BYD are set to overtake Tesla as the world’s top EV seller, ending a long-standing reign.

Stock Slide and Political Headwinds

Tesla’s stock has plunged 25% in 2025, dragged down by missed earnings and public backlash. Elon Musk’s political activities, including backing far-right parties and helping slash government regulations, have sparked protests outside Tesla stores. Even loyal investors worry that the brand damage could be lasting.

Robotaxis and Hope—or More Delays?

Musk promises that Tesla’s robotaxi service, piloting soon in Austin, and factory-built humanoid robots will reshape the future. But Tesla has missed its self-driving deadlines for six years straight, and even Musk joked he’s the “boy who cried FSD” (Full Self-Driving). Meanwhile, giants like Ford and GM have pulled back from robotaxi dreams, warning that profitability could be many years away.

Final Thoughts

While Musk insists Tesla isn’t near collapse, the numbers suggest the company is in rougher shape than it’s been in years. With shrinking profits, falling sales, and political storms swirling, Tesla’s future hinges on whether its big promises can finally turn into real results.

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