Shares in Tesla Inc. rose more than 4% in late trading today after Chief Executive Officer Elon Musk announced that he would be spending less time on the Department of Government Efficiency and more time on Tesla starting in May.

The shares rose despite the company’s first-quarter earnings report falling short of expectations.

For the quarter ended March 31, Tesla reported adjusted earnings per share of 27 cents, down from 45 cents per share in the same quarter of 2024, on revenue of $19.34 billion, down 9% year-over-year. Both were solid misses, as analysts had been expecting 39 cents per share on revenue of $21.11 billion.

Not surprisingly, given that the last few months have seen protests against Tesla because of Musk’s DOGE activities, the most significant decline in the quarter came from automotive sales, which were down 20% year-over-year, to $13.97 billion.

The good news for Tesla is that anti-Musk protesters haven’t started attacking its solar panels yet, and Tesla energy generation and storage revenue coming in at $2.73 billion in the quarter, up 67% year-over-year. Tesla also saw service and other revenue growth of 15% year-over-year, to $2.64 billion.

The quarter saw Tesla’s vehicle production drop 16% year-over-year, to 362,615 units, and deliveries drop 13%, to 336,681 units. Conversely, energy storage deployed rose 154% year-over-year, to 10.4 gigawatt-hours. Powerwall installations — rechargeable lithium-ion battery system designed for home energy storage — surpassed 1 GWh in the quarter, a record high for the company.

The drop in vehicle production was attributed by Tesla to a need to update lines at its four vehicle factories to start making a refreshed version of its popular Model Y SUV.

Free cash flow in the quarter came in at $664 million, operating cash flow at $2.16 billion and as of the end of the quarter, Tesla was sitting on cash and investments of $37 billion, up $400 million from the fourth quarter of fiscal 2024.

Looking forward, Tesla revealed a cautious outlook, with the company refraining from providing full-year guidance and indicating plans to revisit its 2025 projections in the next quarter. Tesla cited increasing challenges, including declining vehicle deliveries, margin pressures and uncertainties stemming from global trade policies and macroeconomic conditions.

Despite the challenges, Tesla said it remains committed to its strategic initiatives, including the production of more affordable vehicle models and the development of autonomous technologies. The company plans to commence production of new, cost-effective models in the first half of 2025, aiming to address market demand and expand its customer base.

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