Tesla signals caution, says it will revisit 2025 growth outlook

Kara Carlson, Bloomberg News on Apr 22, 2025

By clicking submit, I authorize Arcamax and its affiliates to: (1) use, sell, and share my information for marketing purposes, including cross-context behavioral advertising, as described in our Privacy Policy , (2) add to information that I provide with other information like interests inferred from web page views, or data lawfully obtained from data brokers, such as past purchase or location data, or publicly available data, (3) contact me or enable others to contact me by email or other means with offers for different types of goods and services, and (4) retain my information while I am engaging with marketing messages that I receive and for a reasonable amount of time thereafter. I understand I can opt out at any time through an email that I receive, or by clicking here

Tesla Inc. backed away from an earlier view for 2025 sales growth and pledged to revisit its outlook next quarter, a sign that tariffs, an aging vehicle lineup and the backlash against Chief Executive Officer Elon Musk are having an impact on the electric-vehicle maker.

The company on Tuesday reported adjusted earnings of 27 cents per share for the first quarter, below the average analyst estimate. Tesla omitted an earlier prediction that sales would return to growth for the full year, saying instead that it’s “making prudent investments that will set up” the vehicle business for growth. That will depend on factors including production increases and the “broader macroeconomic environment.”

“It is difficult to measure the impacts of shifting global trade policy on the automotive and energy supply chains, our cost structure and demand for durable goods and related services,” Tesla said.

The shares rose 2.9% at 5:24 p.m. in extended New York trading.

The dimmer outlook for the year follows a tough 2024, when the carmaker missed its annual sales growth target for the first time in more than a decade. It also fell short of analysts’ expectations for first-quarter vehicle sales, which were released earlier this month.

President Donald Trump’s tariffs are compounding Tesla’s challenges, and threaten to upend automotive supply chains globally and drive up costs across the industry. While Tesla is expected to be relatively less affected than many carmakers due to its large plants in California and Texas, its vehicles nevertheless contain some non-U.S. components, and the company has warned of a potential impact.

Ben Kallo, a senior research analyst with Baird, said Tesla’s mention of tariffs is a way for the company to alert policy makers of the pain the levies are causing.

“It’s a way to get the message across that tariffs are going to impact Elon without him saying that as part of the U.S. government,” Kallo said. “He’s walking a tight rope there while part of the government with DOGE,” referring to the Musk-led Department of Government Efficiency that Trump created after taking office.

Tariffs will have a “relatively larger impact” on the energy business compared to automotive, Tesla said. The company’s Megapack energy storage systems heavily rely on LFP battery cells from China, which accounted for 84% of global lithium-ion battery production capacity in 2024, according to Wood Mackenzie. By comparison, North America made up just 5%.

Consumer backlash

Musk’s endorsement of controversial political positions in Europe and close ties to Trump have also sparked backlash globally. Tesla showrooms and charging stations have become targets for protests and vandalism, particularly in the U.S. Tesla Takedown, a decentralized movement that accuses Musk of harming democracies around the world, is encouraging people to sell their Tesla vehicles and the company’s stock while condemning violence and vandalism.

Earlier this week, Wedbush Securities analyst Dan Ives wrote that Tesla faces “potentially 15%-20% permanent demand destruction for future Tesla buyers due to the brand damage Musk has created with DOGE.”

The company said that “changing political sentiment” is another element that “could have a meaningful impact on demand for our products in the near-term.”

Autonomy, robotics

Musk is increasingly betting Tesla’s future on autonomy, such as a driverless taxi, and robotics, including the humanoid Optimus robot.

“While we continue to execute on innovations to reduce the cost of manufacturing and operations, over time, we expect our hardware-related profits to be accompanied by an acceleration of AI, software and fleet-based profits,” the company said in its shareholder deck.

The automaker said plans for new vehicles, including more-affordable models, remain on track for the start of production in the first half of this year. That may come as a surprise to some investors after Reuters reported last week that the production launch would be delayed by a few months.

Tesla said it had already prepared its factories for the launch of new models during downtime while switching production lines over for the refreshed Model Y. It emphasized the need for more affordable options amid current economic uncertainty that has resulted from trade policies.

(With assistance from Keith Gerstein and Michelle Ma.)