AUTO

Tesla’s Q1 2025 Earnings Aren’t the Whole Story. They’re Just the Setup.

April 23, 2025

Tesla completed a global Model Y production refresh, disrupting Q1 2025 deliveries, but by design.
Robotaxis will begin paid autonomous rides in Austin in June 2025.
Tesla’s energy storage division hit record gross profit in Q1, even as auto margins declined.

What happens when the world’s most-watched car company stalls for a moment? Cue the headlines. The hand-wringing. The stock market panic.

But here’s the thing, Tesla’s Q1 2025 earnings weren’t great because they weren’t supposed to be.

Wait, what?

Let’s rewind. Tesla decided to refresh every single global factory for the world’s bestselling vehicle, the Model Y. All at once. Yes, really. All four factories, all undergoing changes, simultaneously. If that sounds absurd, it kind of is. As Vaibhav Taneja, the CFO of Tesla mentioned on the Q1 2025 financial results and Q&A webcast, “We’re not aware of anybody else being able to do the bestselling car all at once within a quarter.”

And just like that, production dipped, deliveries dropped, and Wall Street hit the panic button. But was this a red flag or just… a pit stop?

Here’s the truth most people missed: Tesla sacrificed short-term profits to set up long-term scale. And the rest of this earnings call? That’s where things got spicy.

_{A Tesla Model Y parked in front of Tesla-branded tents as Electrify Expo attendees line up and wait to demo it.}

So… What Exactly Happened in Q1 2025?

Let’s start with the headline that grabbed the most attention: vehicle deliveries were down. Auto margins followed the same trend. But none of this came as a surprise. Tesla had already made it clear this would happen as they paused production to update their factories.

Why? Because they were mid-surgery on the Model Y lineup. You don’t tear down and rebuild global production lines in silence. It’s disruptive. But it’s also necessary.

Elon Musk addressed it bluntly, “This is not one of those times where we’re on the ragged edge of death. Not even close.”

Sure, he acknowledged some bumps. But then came the kicker, “I continue to believe that Tesla… will be the most valuable company in the world by far. Maybe as valuable as the next five companies combined.”

Now, if that sounds delusional to you, consider that Tesla isn’t betting on cars anymore. It’s doubling down on robots.

Yes, actual humanoid robots.

Wait. Robots?

Meet Optimus, Tesla’s in-house humanoid robot project. According to Elon, “We expect to have thousands of Optimus robots working in Tesla factories by the end of this year.” And he didn’t stop there. “I feel confident in predicting a million Optimus units per year… by 2030. Maybe even 2029.”

Not science fiction. Real robots. Built with Tesla’s own AI chips. Doing real factory work. And eventually? Maybe your groceries.

_{An Electrify Expo attendee poses next to Tesla’s Optimus robot while another person takes a photo with a smartphone.}

Let’s Not Overlook the Cybertruck

Yes, it’s still in play, and no, it hasn’t been shelved behind closed doors. In fact, Tesla confirmed that production is ongoing right alongside the Model Y and Cybertruck builds every day at the Gigafactory in Austin. No flashy announcements, no dedicated buildings. Just trucks rolling out upstairs while regular operations continue below.

As Tesla clarified during the earnings call, large-scale installation of Cybertruck manufacturing equipment is already underway. “We have our first big builds coming at the end of this quarter… and then we start to large scale installation of all the equipment in Giga Texas,” one executive noted.

Electrify Expo San Francisco test ride demo Tesla Cybertruck — _{A Tesla Cybertruck is seen driving on a paved lot with the San Francisco skyline and Bay Bridge in the background during Electrify Expo.}

It’s all happening within a factory Elon Musk described as “three times the size of the Pentagon.” The Cybertruck is being assembled using Tesla’s unboxed manufacturing method, an approach focused on speed, efficiency, and automation.

“No car is made like this anywhere in the world. The factory is the product as much as the car is the product,” Musk said.

So while the company refines its autonomous driving software and prepares its robot lineup, the Cybertruck is quietly building momentum, one aluminum panel at a time.

What About Those Robotaxis?

Oh, you mean fully autonomous Teslas giving paid rides with no driver inside? That starts in Austin, June 2025.

“Unsupervised autonomy will first be solved for the Model Y in Austin,” Musk said. “It’s going to be a scalable thing. We’re not doing a city-specific solution… we’re building general AI that works in any city.”

So what does that mean? Once it works in one place, it works anywhere the law allows. Europe. China. The U.S. It’s a rollout, not a reinvention.

Tesla’s fleet, yes, your own Model Y, might soon become your side hustle.

Elon Musk Reveals the Tesla Robotaxi and Robovan, What’s Next for Self-Driving Cars

And How’s Tesla’s Energy Business?

Glad you asked. While car margins took a hit, Tesla hit record gross profit in its energy storage division. That’s a big deal.

“The mega pack enables utility companies to output far more total energy than would otherwise be the case,” Musk explained.

Powerwall 3 is also here and selling so fast they can’t keep up. So while Tesla’s cars took a breather, its energy business quietly flexed.

But What About Tariffs and the Political Heat?

Now it gets weird.

Yes, Tesla is dealing with tariffs. Especially on its LFP battery cells from China. And yes, that complicates things. But Tesla’s been planning for this.

“This is a pre-pandemic strategy that we accelerated post-pandemic,” one exec explained. “Specifically in the U.S., Model Y has been rated the most American-made car for three years in a row.”

Tesla is already more localized than any other automaker, with supply chains and production strategically tied to each region. That level of preparation helps cushion the impact of tariffs and trade disruptions.

Meanwhile, Musk continues to dedicate part of his week to his role with the federal government’s Department of Government Efficiency, also known, fittingly, as “DOGE.”

“The natural blowback from that is those who were receiving the wasteful dollars… will try to attack me and anything associated with me.”

Welcome to Tesla, 2025.

_{A Tesla Cybertruck and Model Y are parked in front of Tesla-branded tents as Electrify Expo attendees line up and wait to demo them.}

Tesla’s Bigger Story

Don’t let a single quarter cloud the big picture. Tesla didn’t stumble. It paused to prepare. Behind the headlines, the company is developing fully autonomous ride-hailing, building humanoid robots, and expanding energy systems that support entire power grids.

Yes, Q1 2025 had lower deliveries and profits. But that is not the full picture.

This is the real story.

In Musk’s words, “Sustainable abundance for all… closest thing to heaven we can get on Earth basically.”