Tesla: Dragged into the ditch by Musk? Time to test your faith again!
$Tesla(TSLA.US) released its Q1 2025 earnings after the U.S. market closed on April 22 Beijing time, delivering results that appeared poor at first glance but actually contained hidden signs of improvement. Here are the key takeaways:
1. Total revenue fell short of market expectations: This quarter's total revenue was $19.34 billion, significantly below outdated market expectations but only slightly lower than the updated auto revenue estimates of around $20 billion from major banks after Tesla's sales release, as noted by Dolphin Research.
2. Auto gross margin exceeded expectations: The pure auto sales gross margin (excluding carbon credits) reached 12.5% this quarter, down 1.1 percentage points sequentially. However, due to low Q1 sales and temporary production halts for the Model Y Juniper launch, the market had already anticipated a decline. Consensus expectations were 12.2%, with some banks even projecting 11%-12% or single digits. Thus, Tesla's performance here surpassed expectations.
3. Average selling price (ASP) stabilized: Tesla's ASP per vehicle (excluding carbon credits and leases) was $40,000 in Q1, up $200 sequentially from $39,800. Dolphin Research views this as a positive, attributing the stability to the Model Y Juniper's high launch price offsetting promotional incentives and model mix changes.
4. No emphasis on 2025 volume growth guidance, but the affordable Model 2.5 remains on track: While Tesla previously guided for positive YoY growth in 2025, it did not reiterate this in Q1, stating it would provide updated guidance in Q2. The affordable Model 2.5, crucial for 2025 volumes, is still slated for production in H1 2025, dispelling rumors of its cancellation.
5. Operating profit and margins continued sequential declines: Due to revenue misses and higher operating expenses, Q1 operating profit fell ~$1.2 billion sequentially to $400 million (below consensus of $700 million), with operating margins dropping 4 percentage points to 2.1%.
Dolphin Research's overall view:
While Tesla's results initially seemed disappointing, they were only slightly below updated bank estimates post-sales release. Auto ASPs held steady sequentially, and gross margins outperformed expectations despite headwinds from production halts and low volumes.
Key focus areas:
1) Affordable Model 2.5 launch timing: Its planned H1 2025 production (likely June) is critical to stabilizing 2025 volumes amid regional challenges:
a) U.S.: Potential IRA tax credit cuts in H2 could raise effective prices by ~12%, forcing Tesla to choose between volume and margin.
b) Europe: Relaxed 2025 emissions targets and brand damage from Musk's political activities pose risks.
c) China: Aging products and intense competition require heavy incentives.
Current 2025 volume estimates stand at 1.81M (+1.3% YoY), with some banks projecting 1.7M (including ~100K Model 2.5 units).
2) Robotaxi and Optimus progress: Robotaxi piloting begins in Texas in June, while Optimus robots are on track for factory deployment by year-end.
3) Musk's reduced DOGE involvement: His focus is shifting back to Tesla management.
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