Tesla Q1 2025 Report: Profits Plunge 71%, Bitcoin Position and Cheaper EV Hype Keep TSLA Afloat

Key Takeaways

• Tesla’s first-quarter EPS dropped 40%, falling to $0.27, missing Wall Street’s already-lowered expectations.
• Despite the disappointing results, TSLA shares rose slightly in after-hours trading.
• Tesla also maintained its 11,509 Bitcoin holdings throughout the quarter.

Tesla’s first-quarter results were a tough pill to swallow, with the electric vehicle giant posting a significant drop in earnings and revenue that missed analysts’ expectations.

However, despite the challenging numbers, investors are looking beyond the immediate downturn and focusing on what lies ahead — cheaper EVs, continued innovation in autonomy, and steady progress on its energy ventures.

While the results showed cracks in the company’s core business, Tesla’s focus on future growth and diversification remains clear.

From maintaining its Bitcoin (BTC) holdings to advancing plans for more affordable vehicles, the company continues to position itself for long-term success.

Tesla’s Q1 Misses the Mark

Tesla’s first-quarter numbers were rough. Earnings per share (EPS) sank 40% to just $0.27, missing already-lowered expectations, while revenue fell 9% year-over-year to $19.3 billion, well short of Wall Street’s $21.3 billion target.

Net income plunged 71% to $409 million, a steep drop from $1.39 billion a year earlier. Adjusted EPS also missed, landing at $0.27 versus the $0.44 that analysts had forecast.

Tesla pointed to fewer deliveries, lower average selling prices, and temporary Model Y production updates across all four of its factories. Total production fell 16% to 362,615 vehicles, with deliveries down 13% to 336,681.

None of this caught analysts completely off guard.

Morgan Stanley’s Adam Jonas had already warned that Q1 would bring “weak numbers,” especially after Tesla’s earnings expectations were slashed by over 40% since the end of 2024. Just a few months ago, the Street had expected Tesla to post Q1 EPS of $3.31.

Despite the downturn, Tesla’s cash position remains strong. Cash and equivalents rose 38% year-over-year to nearly $37 billion, even as cash flow dropped to $664 million, down sharply from $2.03 billion in the previous quarter.

Capital expenditures also came in lighter, falling to $1.49 billion from nearly $2.8 billion in Q4 and a year ago.

Tesla Dangles Cheaper EVs and Self-Driving Hopes

Despite missing expectations across the board, Tesla stock edged up 0.8% in after-hours trading Tuesday after the company reassured investors that it still has plenty of cash to fund its roadmap.

Earlier in the day, Tesla shares closed 4.6% higher at $237.97, lifted by a broader market rally and cautious optimism around the company’s longer-term plans.

Tesla told shareholders that all major vehicle initiatives — including its long-awaited lower-cost models — remain on track, with production slated to begin in the first half of 2025.

While the upcoming EVs appear to be trimmed-down versions of the existing Model 3 and Model Y, rather than entirely new vehicles, some analysts say they could still move the needle.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, acknowledged the disappointing results but noted the market’s surprising response.

“This was, objectively, a weak set of numbers—there’s no sugar-coating it,” he told CCN. “Yet, Tesla shares have managed to ride the wave of a broader market rally, as investors seem willing to overlook declining auto sales for now and focus instead on the bigger prize: an autonomous future.”

On Tesla’s vehicle roadmap, Britzman pointed to the company’s plans for lower-cost models, describing them as “streamlined versions of the existing Model 3 and Model Y.”

While not a dramatic overhaul, he said they could still prove effective: “It’s not quite the disruptive refresh some had hoped for, but if these versions can unlock new customer segments, it could be a net win—especially for maximizing output at current facilities.”

Autonomy remains Tesla’s most compelling long-term play, Britzman added, with the ride-hailing pilot in Austin set to begin this June and full-scale Cybercab production expected in 2026.

“In the race to bring AI into the physical world, Tesla still looks like the company with the most to gain,” he said.

Bitcoin Holdings Hold Steady

Tesla didn’t touch its Bitcoin stash in Q1 2025, holding firm at 11,509 BTC, the same position it built back in early 2021 when it became the first major automaker to dive into digital assets.

Despite a 12% drop in Bitcoin’s price during the quarter, Tesla reported a holding value of roughly $951 million at the end of March.

However, with BTC bouncing back to around $93,000, the company’s crypto portfolio has once again climbed above the $1 billion mark.

The latest valuation reflects a shift in accounting rules. Under new Financial Accounting Standards Board (FASB) guidelines, companies must now mark crypto to market each quarter, giving investors a clearer picture of unrealized gains and ditching the old system of recording only the lowest value.

Meanwhile, Tesla’s energy business delivered a strong performance, with revenue jumping 67% year-over-year. Regulatory credit revenue also rose to $595 million, up from $432 million in Q1 2024.