Things at Tesla are worse than they appear | CNN Business
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How bad are things at Tesla? So bad that it would have lost money in the first three months of the year had it not been the sale of regulatory credits, credits that could be going away if the Trump administration gets its way on auto emissions rules.

Things are undoubtedly bad at Tesla. Its sales are dwindling. Its profits are plunging, as is its share price. There are regular protests outside its showrooms. The Cybertruck is a flop. And somehow, it’s actually a lot worse than that.

The 71% drop in net income it just reported may have been overshadowed by CEO Elon Musk’s announcement that he would be stepping back from his controversial duties at the Department of Government Efficiency (DOGE). But that drop is just one indication of serious financial sickness at the EV maker, problems brought on by falling sales for the first time in its history and falling prices for electric vehicles.

The bottom line problem at Tesla is its vanishing bottom line. A deeper look at its first quarter report shows it’s now losing money on what should be its ostensible reason for existence – selling cars.

It was only able to post a $409 million profit in the quarter thanks to the sale of $595 million worth of regulatory credits to other automakers.

But if the Trump administration gets its way, the company can kiss those regulatory credits keeping it in the black goodbye, too.

  • Buffalox@lemmy.worldEnglish
    251·
    1 day ago

    It was only able to post a $409 million profit in the quarter thanks to the sale of $595 million worth of regulatory credits to other automakers.

    Without the regulatory credits, and capital gains Tesla would be $500 million in the red.
    And sales continue to drop in all markets. Tesla is no longer competitive in China and EU, only in USA due to tariffs on cars.
    A couple of years ago Tesla boasted the highest margins in the industry on their cars, now they are so low, that if prices continue to drop, Tesla will soon be at s deficit on every car sold if they try to follow, or if they don’t reduce prices, their cars will simply be too expensive. Damned if you do, damned if you don’t.

    • Imgonnatrythis@sh.itjust.worksEnglish
      12·
      1 day ago

      Maybe they will get bailed out like the airlines did though. I want to see them burn, but nothing seems to work the way it’s supposed to anymore.

      • shalafi@lemmy.worldEnglish
        5·
        22 hours ago

        Airlines run on paper-thin margins and are critical to the economy and country as a whole. Yeah, we kinda have to keep them afloat. Tesla does not enjoy that sort of role.