Tesla said Tuesday that its profits fell 71 percent in the first three months of the year, which could increase the pressure on Elon Musk, the automaker’s chief executive, to curtail his work for President Trump and spend more time managing the company.
The company said it earned $409 million, down from $1.4 billion in the first quarter of 2024, Tesla said.
Tesla sales have been slumping because of intense competition from Chinese carmakers like BYD, a lack of new models and Mr. Musk’s support of far-right causes, which has turned away some liberals and centrists from buying Tesla vehicles.
Tesla remains the most valuable automaker in the world as measured by its stock price, and it sells far more electric vehicles in the United States than any other company. But its shares have lost about half their value since mid-December as investors have grown more pessimistic about the company’s prospects and concerned about Mr. Musk’s role in the Trump administration.
Tesla has steadily lost market share to Chinese carmakers and more established automakers, like General Motors, Volkswagen and Hyundai, that have been offering a growing selection of electric vehicles.
Mr. Musk’s company once hoped to sell 20 million vehicles a year by the end of the decade, twice as many as Toyota. But sales have been sliding after climbing to 1.8 million in 2023. Last year, the company sold 1.7 million cars, and its global sales fell 13 percent in the first quarter of 2025 from a year earlier.
The Cybertruck, Tesla’s newest vehicle, which consumed a lot of the company’s resources while it was being developed, is looking increasingly like a flop. Sales of the Cybertruck in the first quarter were down about 50 percent from the last three months of the year, according to Cox Automotive, a research firm.
Tesla’s website has recently offered discounts of as much as $8,500 on trucks in the company’s inventory. The Cybertruck starts at $70,000 before federal and state incentives.
The automaker had promised to begin selling a lower-cost vehicle by the end of June that would make it possible for more people to afford an electric vehicle and potentially revive sales. But the company has not displayed a prototype or provided many details about the car.
It appears increasingly unlikely that the new vehicle will be available during the next two months. It is also not clear whether the car will be a new design or simply a stripped-down version of Tesla’s Model 3 sedan or Model Y sport utility vehicle.
Mr. Musk’s role at the federal office called the Department of Government Efficiency, which has slashed the budgets of federal agencies and cut thousands of jobs, has made him a lightning rod. Activists have protested outside Tesla dealerships around the world, and Tesla vehicles have been vandalized or even burned.
Tesla is probably less vulnerable to Mr. Trump’s tariffs on autos and parts than other carmakers because its factories in California and Texas make all the vehicles that it sells in the United States. The company also has car factories in Shanghai and near Berlin, which serve much of the rest of the world.
But Tesla will also suffer. Its U.S. factories use parts imported from Mexico and China that will be subject to tariffs, forcing the company to raise prices or take in lower profits.
Mr. Musk has said the company’s future is in artificial intelligence technology that will allow Tesla vehicles to drive themselves without human intervention, enabling fleets of Tesla “Cybercabs” to make money ferrying customers.
But Tesla has not yet perfected the technology and faces competition in that nascent business from several Chinese companies and Waymo, a unit of Alphabet, the parent company of Google.
Waymo’s autonomous cars have offered paid rides for several years in Phoenix and San Francisco and are expanding to more places. Last month, Waymo said it was completing about 200,000 paid rides every week in four cities and announced plans to expand to Washington. It is also testing its cars in Tokyo.
Some analysts doubt whether Tesla autonomous vehicles will ever generate the trillions of dollars in revenue that Mr. Musk has said they would. Uber, which has been offering paid rides for 15 years and is working with Waymo in Austin, Texas, reported revenue of $12 billion in 2024.
Jack Ewing writes about the auto industry with an emphasis on electric vehicles.
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