Before the Q1 financial report is released, Tesla "falls first to show respect," and how Musk turns the situation around is highly anticipated

According to Zhitong Finance APP, just one day before Tesla (TSLA.US) announced its Q1 2025 financial report, the stock fell nearly 6% on Monday. This marks the 12th time this year that the stock has dropped at least 5% in a single trading day. Investors are eagerly seeking answers regarding the plans that Tesla CEO Elon Musk has set for the electric vehicle manufacturer, especially in the context of his frequent involvement in Trump administration affairs.

Tesla's stock closed at $227.50 on Monday, less than $6 above its year-to-date low of April 8. Data shows that the stock fell nearly 36% in the first quarter, marking its worst quarter since 2022; it has accumulated a decline of nearly 44% year-to-date.

In addition to Musk's role in the Trump administration, the company's long-delayed progress on robotaxi and autonomous driving technology has also been a focal point of concern. Before the earnings call, there were over 300 questions regarding Tesla's autonomous driving system on the online platform used to collect investor inquiries, about 200 questions related to its developing humanoid robot "Optimus," and over 160 questions related to Musk personally. One investor asked, "What measures has the board taken to mitigate the damage to the brand caused by Elon’s political behavior?"

Musk is currently leading a plan to reduce the size of the U.S. federal government, including laying off tens of thousands of employees, selling or terminating leases on federal office buildings, and reducing government operational capacity. Musk's political stance and actions have sparked strong backlash in parts of Europe and the U.S. This year, Tesla has faced a series of protests, boycotts, and even targeted vandalism of its vehicles and facilities. A March survey by research firm Caliber, which tracks changes in American consumers' perceptions of major brands, showed that only 27% of respondents would consider purchasing a Tesla, down from 46% in January 2022.

Musk's political stance and actions, combined with the Model Y facelift and increasing competition, led to Tesla delivering only 336,681 vehicles in the first quarter, a 13% year-over-year decline, falling short of analyst expectations.

For the upcoming earnings report, LSEG data shows that analysts expect Tesla's Q1 revenue to be $21.14 billion, slightly down from the same period last year; earnings per share are expected to be $0.40. In this latest financial report, investors will be particularly focused on any comments regarding the Trump administration's tariff policies and their potential impact on revenue and profits over time.

Analysts at investment bank Oppenheimer stated in a report on Monday that Tesla's "ongoing brand erosion" in the U.S. and Europe has put pressure on sales, but "the bigger issue for the company is the potential weakness in demand in the Chinese market and the impact of Trump administration tariffs on margins."

Dan Ives, an analyst at Wedbush who remains bullish on Tesla in the long term, hopes that Musk will bring a "turnaround vision" during Tuesday's earnings call. He stated, "Tesla has unfortunately become a political symbol associated globally with the Trump administration/Government Efficiency Department (DOGE)." "He pointed out that since Trump returned to the White House, Tesla's stock price has been severely impacted. He also estimated that due to Musk's involvement in Trump administration affairs, brand damage has caused 'about 15% to 20% of permanent demand to disappear among future Tesla buyers.'

Barclays maintained its 'sell' rating on Tesla late last week and lowered its target price from $325 to $275, citing 'weak fundamentals and a confusing outlook' for the first quarter. The bank stated that if Musk can refocus on the automotive business and the company provides disclosures on the anticipated 'FSD activities' (i.e., fully autonomous driving products), the market may react positively