Elon Musk Faces Pressure as Tesla Sales Plummet Dramatically

Elon Musk Faces Challenges as Tesla’s Sales Plummet
On April 25, 2025, Tesla reported a significant decline in its first-quarter financial results, revealing a 71% drop in net profit. The company’s once-thriving performance seems to be faltering. According to the financial report, Tesla’s revenue for the first quarter reached $19.335 billion, falling short of some analysts’ expectations, which had projected $21.37 billion.
The gross profit was reported at $3.153 billion, a decrease of 15% year-over-year. Net profit stood at $420 million, a stark contrast to $1.405 billion from the same period last year. Following U.S. Generally Accepted Accounting Principles (GAAP), Tesla’s net profit attributable to common shareholders for the first quarter was $409 million, down 71% year-over-year.
In terms of research and development, Tesla spent $1.409 billion in the first quarter, marking a 22.4% increase compared to the previous year. Notably, expenditures on AI and autonomous driving accounted for 42% of this budget, while the humanoid robot project consumed $210 million. The surge in R&D expenses has put considerable pressure on Tesla’s profits.
Although Tesla’s energy business continues to grow rapidly, it is not enough to offset the losses from its automotive sector. Revenue from services and other operations reached $2.638 billion, but the gross margin hovered near break-even. Furthermore, as the Supercharger network expands, the utilization rate per charging station has dropped from 82% in 2023 to 71%, with maintenance costs soaring by 34%. The resale value of used Teslas has also plummeted from 78% in 2022 to 63%, directly impacting residual income.
In terms of production and sales data, Tesla’s global output for the first quarter was 362,600 units, representing a 16% decline year-over-year, while global sales totaled 336,700 units, down 13%. Deliveries of the Model 3/Y reached 323,800 units, down 12.4% from the previous year, with the average selling price decreasing from $42,000</b to $40,000. The drop in per-vehicle profit has outpaced the decline in sales volume.
Tesla’s performance in global markets has been underwhelming. In China, the Shanghai Gigafactory delivered over 172,000 Model 3 and refreshed Model Y vehicles, achieving domestic sales of 134,000 units. However, Tesla’s growth rate has noticeably slowed, struggling against the broader market environment. In Europe, the situation is even more dire. In January, demand for battery electric vehicles surged, with EU, EFTA, and UK markets seeing more than 37% year-on-year growth. Yet, Tesla’s sales fell dramatically during this period. According to the European Automobile Manufacturers Association, Tesla’s sales in the EU have declined for three consecutive months, with new vehicle registrations dropping by 50%, 47%, and 36% in January, February, and March respectively.
In the U.S. market, while overall electric vehicle sales grew by 11.4% year-over-year in the first quarter, Tesla’s sales fell by 8.6%. In Australia, sales plummeted by 71.9% in February. Tesla attributed its poor financial performance to the need for multiple price cuts to maintain market share amid stiff competition, which has directly affected per-vehicle profits. Additionally, investments in research, production, and sales have been steadily increasing.
In the secondary market, Tesla’s stock has faced heavy selling pressure. The stock peaked at $488.54 per share on December 18 last year, but has since seen a sharp decline. On March 10, Tesla shares dropped over 15% in a single day, marking the worst intraday record since September 2020. By April 7, the stock hit a temporary low of $214.25 per share. As of now, Tesla’s latest stock price is $250.74 per share, with a total market capitalization of $806.5 billion. Over the past four months, Tesla’s stock has fallen nearly 50%.
An investor remarked, “This is the worst performance I have ever seen from Tesla.” Some investors believe that the decline in Tesla’s performance and stock price is linked to Musk’s personal activities, which have distracted him from focusing on Tesla’s business. During the recent earnings call, Musk sighed deeply, seeming overwhelmed by the current pressure, and indicated that starting in May, he would return his focus to the company, dedicating most of his time to its operations.
Elon Musk: A Blend of Genius and Controversy
Musk, the world’s richest person and a prominent tech figure, had a net worth of $455 billion as of December 16 last year, becoming the first billionaire to surpass the $400 billion mark. According to Informa Connect Academy, a firm that studies the financial status of the wealthy, Musk could become the world’s first trillionaire by 2027. The saying goes that behind every successful person lies an extraordinary story, and Musk’s is no exception. Born in South Africa in 1971, Musk experienced his parents’ divorce at age nine and grew up in solitude. While peers were engrossed in video games, he was dismantling IBM computer motherboards and coding to create virtual universes.
Later, Musk excelled academically and gained admission to the Wharton School at the University of Pennsylvania, even securing an opportunity to pursue a PhD at Stanford. However, he deviated from the norm and dropped out after just two days to start a business. He founded Zip2 with $2,800, which Compaq acquired four years later for $307 million. With this initial fortune, Musk could have become a Silicon Valley luminary, but he wagered it all on two audacious dreams: reducing space costs with reusable rockets and revolutionizing the automotive industry with electric vehicles.
In June 2002, Musk established SpaceX in a warehouse in suburban Los Angeles, despite NASA experts asserting that “it was akin to making a pencil stand upright on a table.” Musk’s determination meant he would not give up easily. Over a decade later, when a recovery ship successfully caught a vertically landing rocket, the entire aerospace industry shook. During the financial crisis of 2008, Tesla’s Roadster faced multiple production failures, forcing Musk to personally cover employee salaries. In his darkest moments, he sold his private jet and sports car, even emailing friends for loans. He lived in a basement, creating a “miracle equation” for the automotive industry amid adversity.
Today, Musk has built a vast business empire. In addition to being the founder of Tesla, he serves as CEO and CTO of SpaceX, is the chairman of SolarCity, CEO of Twitter, founder of Neuralink, and co-founder of OpenAI. “My goal has never been to make money, but to make humanity a multi-planetary species,” Musk has stated, showcasing his almost obsessive vision. Last year, he remarked, “If we’re lucky, we might send humans to Mars within eight years,” which contributes to his “madman” reputation.
Beyond his professional life, Musk’s personal life is equally complex. He married Justine Wilson in 2000, but their first child tragically died at just ten weeks old. In 2004, they welcomed twins through IVF, followed by triplets in 2006. However, their marriage ended in 2008. Musk later dated Canadian musician Grimes, with whom he had a son named X (nicknamed “X Baby”) via surrogacy, as well as a daughter, Exa Dark Sideræl (nicknamed “Y”), and a son, Techno Mechanicus (nicknamed “Tau”). In addition to his children with Grimes, Musk has four children with Shivon Zilis, an executive at Neuralink, including twin sons Strider and Azure, along with two other children that were later revealed. Additionally, a 31-year-old writer, Ashley St. Clair, claims to have had a child with Musk, and they are currently negotiating custody arrangements.
Musk has expressed that as a wealthy individual, having more children is a way of contributing to humanity.