Tesla Stock Soars 6.74% on Earnings Call Optimism

On April 23, 2025, Tesla's stock rose by 6.74% in pre-market trading, reflecting investor optimism amidst a challenging quarter.

During Tesla's earnings call, CEO Elon Musk reiterated his support for reducing tariffs, although he acknowledged that the final decision lies with the Trump administration. Tesla's energy business has been significantly impacted by high tariffs on phosphoric acid lithium batteries sourced from China. To mitigate this, Tesla is accelerating the deployment of domestic production facilities for these batteries, though current domestic capacity remains limited.

Musk also addressed the impact of China's export restrictions on rare earth elements, which have affected the production of Tesla's humanoid robot, Optimus. Tesla is actively seeking export licenses for rare earth materials from China to ensure the continuity of its production processes.

Tesla's first-quarter financial results showed a 71% drop in profits, with revenue declining by 9% year-over-year to $19.3 billion. The company delivered 336,681 vehicles, a 13% decrease from the previous year. This downturn was attributed to production halts for the Model Y upgrade and a general slowdown in global electric vehicle demand. Despite these challenges, Tesla's automotive gross margin stood at 12.5%, slightly above expectations. The company also announced plans to launch a low-cost new car model in the first half of 2025 and a fully autonomous ride-hailing service by 2026.

Tesla is also facing a class-action lawsuit alleging that the company's mileage readings are inaccurate, potentially affecting over 100,000 vehicles. The lawsuit claims that Tesla's system artificially inflates mileage readings to reduce warranty costs and increase profits. This is not the first time Tesla has faced legal challenges related to data accuracy, and the lawsuit has renewed public scrutiny of the company's transparency in vehicle data reporting.