Tesla earned $477 million in the first quarter, up from $409 million a year earlier, but the profit fell short of Wall Street expectations and remained far below the more than $3 billion the company reported in Q1 2022. Sales rose 16 percent to $22.4 billion, yet the automaker continues to grapple with tepid car demand and shrinking revenue from clean-air credits after Congress and President Trump dismantled the regulations that required such trading.

The company produced 408,000 vehicles in the quarter but delivered only 358,000, raising concerns about oversupply. Tesla has stopped producing its luxury Model S and Model X, leaving the Model 3 and Model Y as nearly the sole sources of automotive revenue. These vehicles appear increasingly dated compared with new offerings from Chinese competitors who are selling electric cars at significantly lower prices with comparable or superior technology.

Despite these headwinds, CEO Elon Musk is betting big on unproven products. Tesla broke ground on a facility near Austin that it claims will eventually produce 10 million humanoid robots annually, and the company has begun offering paid autonomous rides in Texas cities, with more than 1.6 million miles ridden so far. The market values Tesla at $1.2 trillion based on promises of AI-driven products, but investors are showing uneasiness—shares have dropped more than 10 percent since year-end.