Musk Blames Massive Tesla Losses on Political 'Blowback'

Production is down, profits are down, and net income (GAAP) is down 71 percent.

Photo by: Motor1.com

By: Christopher Smith

Apr 22, 2025 at 5:26pm ET

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Tesla's Q1 2025 financial update is filled with bad news. There are all kinds of negative numbers inside, not the least of which being a year-over-year net income drop (attributable to common stockholders) of 71 percent.

A summary of Tesla's current standing was released prior to the company's Q1 conference call. But Tesla CEO Elon Musk sought to ease investors' worries by largely blaming politics and "blowback" from his work in the Department of Government Efficiency (DOGE). Specifically, he mentioned "those who were receiving wasteful dollars" as waging attacks on him and the DOGE team.

"The protests that you’ll see out there, they’re very organized, they’re paid for," said Musk. "They’re obviously not going to say the reason they’re protesting is because they were receiving fraudulent money, or were the recipient of waste and fraud. So they’re going to come up with some other reason, but that is the real reason."

He also conceded that tariffs could affect the company, but that the decision ultimately rests with US President Donald Trump.

"We're not on the ragged edge of death, not even close," said Musk. "There will probably be some unexpected bumps this year. But I remain extremely optimistic about the future of the company."

In addition to the 71-percent income drop, operating income is down 66 percent. Total gross profit is down 15 percent. Total revenue is down 9 percent. As for vehicles, total production is down 16 percent across all models, while deliveries are down 13 percent.

2025 Tesla Model Y

Photo by: Tesla

According to Tesla's report, part of the production decline is due to the Model Y update that slowed activity across the company's four factories for several weeks. The financial hit is partially due to reduced average vehicle selling prices, along with a drop in deliveries and an increase in operating expenses.

As for Musk's role in government, he expects to largely return to full-time CEO duties in May but could continue to spend at least some time in Washington beyond that. Tesla's official Q1 report doesn't elaborate on any of this, but it does reinforce Musk's statement that tariffs could impact the company's bottom line. Per the report:

'Uncertainty in the automotive and energy markets continues to increase as rapidly evolving trade policies adversely impacts the global supply chain and cost structure of Tesla and our peers. This dynamic, along with changing political sentiment, could have a meaningful impact on demand for our products in the near-term.'

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It's not entirely doom and gloom, however. The company says there's "sufficient liquidity to fund our product road, long-term capacity expansion plans, and other expenses." Moreover, plans for the Tesla Semi and Cybercab are still on track for next year, and new "more affordable models" are still planned for a production launch in the first half of 2025.

Since we're already staring May in the face, there's just a little over a month left to fulfill that promise.