Tesla’s first-quarter profits plunged by more than two thirds amid a boycott of Elon Musk’s electric car company that has hurt sales and sent its stock plunging. The Austin, Texas, company said Tuesday that quarterly profits fell by 70% to to $409 million, or 12 cents a share.
That’s far below analyst estimates. Tesla’s revenue fell 9% to $19.3 billion in the January through March period, below Wall Street’s forecast. The disappointing results come as the company is fighting a backlash due to Musk’s leadership of a federal government jobs-cutting group that has divided the country and sparked angry protests.
Wall Street was expecting Tesla to report a profit of 41 cents per share, down slightly from the year-ago quarter. Sales were estimated at $21.3 billion, on par with last year’s quarter.
Tesla is fighting an enormous public backlash due to Elon Musk’s leadership of a federal government cost-cutting group that has divided the country and sparked angry protests at Tesla dealerships nationwide. Some analysts have called for Musk to abandon his role in the Trump administration to focus on Tesla.
Shares of Tesla Inc. have tumbled more than 40% this year.
Tesla investors will be listening closely for updates on several strategic initiatives. The company is expected to roll out a cheaper version of its best-selling vehicle, the Model Y SUV later in the year. Tesla has also said it plans to start a paid driverless robotaxi service in Austin, Texas, in June.
The company that once dominated EVs is also facing fierce competition for the first time.
Earlier this year, Chinese EV maker BYD announced it had developed an electric battery charging system that can fully power up a vehicle within minutes. And Tesla’s European rivals have begun offering new models with advanced technology that is making them real alternatives, just as popular opinion in Europe has turned against Musk.
Investors expect Tesla will be hurt less by the Trump administration's tariffs than most U.S. car companies because it makes most of its U.S. cars domestically. But Tesla won’t be completely unscathed. It sources some materials from abroad that will now face import taxes.
Retaliation from China will also hurt Tesla. The company was forced earlier this month to stop taking orders from mainland customers for two models, its Model S and Model X. It makes the Model Y and Model 3 for the Chinese market at its factory in Shanghai.