Core Insights - Tesla is positioned relatively well against tariffs due to its localized supply chains in North America, Europe, and China, despite facing significant challenges in quarterly earnings and sales [1][2][4] - The company reported a 20% year-over-year decline in automotive revenue and a 71% drop in net income, with no guidance provided for 2025 until the second-quarter update [2] - Musk advocates for lower and predictable tariffs, emphasizing that while Tesla is less affected by tariffs on imported cars, its energy business is significantly impacted due to reliance on materials sourced from China [5][6] Financial Performance - Tesla experienced a 20% decrease in automotive revenue year-over-year [2] - The net income saw a dramatic decline of 71% [2] - The stock price has suffered, dropping 36% in the first quarter, marking the worst performance since 2022 [3] Tariff Impact - Musk stated that Tesla is the "least-affected car company" regarding tariffs, but acknowledged the broader implications of tariffs on the industry [2][3] - The company is not subject to the 25% tariff on imported cars due to domestic manufacturing, but it relies on various international sources for materials and supplies [4] - Musk highlighted the outsized impact of tariffs on Tesla's energy business, particularly concerning lithium iron phosphate battery cells sourced from China [5] Supply Chain Strategy - Tesla is working on local manufacturing of LFP battery cells in the U.S. but can currently only meet a fraction of its total capacity with local equipment [6] - The company is also exploring additional supply chain options from non-China based suppliers, although this will take time [6] - Despite being highly vertically integrated, Tesla still depends on numerous parts and materials from other countries [7]