this post was submitted on 09 May 2025
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397
Things at Tesla are worse than they appear (edition.cnn.com)
submitted 1 day ago by technocrit@lemmy.dbzer0.com to c/technology@lemmy.world
47 comments fedilink hide all child comments
 

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.

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[–] Buffalox@lemmy.world 26 points 1 day ago* (last edited 1 day ago) (1 children)

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.works 13 points 1 day ago (1 children)

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.world 6 points 23 hours ago (2 children)

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.

[–] AA5B@lemmy.world 1 points 1 hour ago

Or instead of trying to keep Airlines’s from sinking, we could invest in intercity rail, so there would be travel options. Imagine having a choice

[–] xav@programming.dev 3 points 7 hours ago

Afloat. An airline.

I'm already out.