Tesla (TSLA, Financials) reported a sharp year-over-year decline in earnings for the first quarter of 2025, missing Wall Street expectations on both revenue and profit as automotive sales dropped and production lines were retooled for upcoming vehicle updates.

Tesla posted adjusted earnings per share of 27 cents in the first quarter, well below the 39 cents expected by analysts, while revenue came in at $19.34 billion, short of the $21.11 billion consensus estimate. The company said it faced multiple headwinds, including a 20% decline in automotive revenue to $14 billion, due in part to factory retooling and reduced vehicle prices.

Total net income fell 71% to $409 million from $1.39 billion a year earlier. Operating income decreased 66% to $400 million. Tesla's shares have declined 41% year-to-date, making it the company's worst quarterly stock performance since 2022.

Tesla did not provide updated full-year guidance, saying it plans to revisit its 2025 outlook in the second-quarter update. The company pointed to global supply chain disruptions and shifting political dynamics, including trade policy changes, as ongoing risks to demand and cost structures.

The company delivered 336,681 vehicles in the quarter, a 13% drop compared with the same period last year. Tesla remains behind competitors in the autonomous driving market but confirmed that a pilot launch of its driverless ride-hailing service in Austin, Texas, remains on track for June.

Revenue from regulatory credits rose to $595 million, compared with $432 million a year ago. These credits helped cushion losses from automotive operations.

Tesla's energy generation and storage segment saw significant growth, with revenue climbing 67% to $2.73 billion, driven by demand for energy storage solutions amid expanding AI infrastructure needs.