Trouble Beneath the Autopilot
My dears, Tesla’s latest quarter is rather like one of its Cybertrucks barreling through a hedge maze: fascinating in concept, brutish in execution, and liable to crash into something expensive. The numbers from Q1 2025 show a company mid-pivot, but the dance floor is rather slick.
Revenue declined 9% year-over-year to $19.3 billion, as the Model Y factory switchover snarled production across multiple geographies. Deliveries fell 13%, and GAAP net income collapsed 71% to just $409 million. Even Elon’s silver tongue would have difficulty making that sound “good.”
Yet, for all the bruising in the automotive business, Tesla’s Energy and Storage segment glowed like a pearl in the muck — up 67% year-over-year. And one must admire their sheer nerve: robots in the works, a robotaxi pilot by June, and Optimus bots preparing to “do useful work.” (One hopes they start by reading the balance sheet.)
Free cash flow turned positive at $664 million — a small mercy — and the balance sheet remains pristine, with $37 billion in cash and investments. But Granny must raise a lace-trimmed brow at the 2.1% operating margin. For a firm that once promised to revolutionize the entire transportation sector, this is dreadfully mortal.
In sum, Tesla remains a creature of grandeur and gamble. A lesser investor might be beguiled by the headlines or hoodwinked by Autopilot demos, but those of us with proper pensions and long memories know the difference between a transformation and a tantrum.
Granny’s Verdict: Tolerate (with skepticism)
