Tesla Misses Earnings, Cash Flow Rises

Core Insights - Tesla reported misses in both revenue and earnings for Q1 2025, indicating financial and operational challenges [1][2] - The company experienced a 9% annual decline in revenue, raising concerns about its financial performance [2] Financial Performance - Tesla's GAAP revenue for Q1 2025 was $19.3 billion, falling short of the anticipated $21.3 billion, representing a 9.4% revenue shortfall [2][6] - Non-GAAP earnings per share (EPS) were $0.27, compared to the expected $0.41, marking a 40% decline year-over-year from $0.45 in Q1 2024 [3] - Net income (GAAP) was reported at $0.41 billion, a significant drop of 71% from $1.39 billion in the previous year [3] - Free cash flow improved to $0.66 billion, a recovery from a negative $2.54 billion in Q4 2023 [3][7] Operational Challenges - Tesla faced a 13% reduction in total automotive deliveries compared to Q4 2024, primarily due to market changes in China and adjustments in Model Y production [7] - The company is actively addressing strategic challenges posed by tariffs on materials, which impact growth stability in the energy sector [9] Technological Developments - Tesla is focusing on advanced technologies such as Full Self-Driving (FSD) and proprietary battery cells to support global manufacturing initiatives [5] - Energy revenue grew by 67% year-over-year, driven by products like the Megapack and Powerwall battery solutions [8] Future Outlook - Management emphasizes navigating volatility through long-term growth strategies and sustaining expansions, with positive guidance for automotive business growth in 2025 [10][11] - Plans for launching new vehicle models, including more affordable options, are set for the first half of 2025, showcasing Tesla's commitment to innovation and market leadership [12]