Tesla update

Tesla’s 1Q25 results were weak, but better than feared. Revenue fell 9.2% YoY in Q1 – see Figure 1.

However, Tesla’s share price is up 21% since the results were released (13% better than the S&P500) – see Figure 2 and Table 1.

The positives that the market will likely focus on in the coming months include:

1) Elon will devote more time to Tesla, E. Musk: "my time allocation to DOGE will drop significantly (…) starting next month, I'll be allocating probably more of my time to Tesla."

2) Tesla will start production of a cheaper model in 1H2025 - despite recent media reports to the contrary.

3) In June, Tesla will start a robotaxi service in Austin, Texas,

4) After lower car deliveries in Q1 - subsequent quarters will be much better - see Figure 3,

5) The time of launch of Unsupervised FSD is approaching - this could happen at the end of this year in several American cities.

According to Musk, Tesla's value depends to the greatest extent on autonomous cars and homanoid robots.

E. Musk: „The future of the company is fundamentally based on large-scale autonomous cars and large-scale, large volume, vast numbers of autonomous humanoid robots. (…) I said I think on the last earnings call that we'll start to see the prosperity of autonomy take effect in a material way around the middle of next year. We expect to have these -- be selling fully autonomous rides in June in Austin, (…) but the real question from financial standpoint is when does it really become material and affect bottom line of the company and start to be a fundamental part of the -- when does it move the financial needle in a significant way? That's probably around the middle of next year, second half of next year.”

The negatives include: (1) the impact of tariffs on the business – but much less than in the case of competitors, (2) the Energy segment will be hit hard by the new tariffs because Tesla imports LFP batteries from China, (3) generally weak demand for cars, including EVs, and (4) strong competition, including from China.