After the earnings release, Tesla stock plummeted by 10% in after-hours trading on Tuesday. This was despite missing Q1 2024 sales, having sharply lower profits, and recalling the recently launched $100,000 Cybertruck, which had seen a recent rise.
The electric vehicle maker’s revenue stood at $21.3 billion, slightly below expectations of $21.48 billion and down by 9% from a year ago, marking the largest decline since 2012. Profits were reported at $1.1 billion, a 55% drop from the first quarter of 2023, the company announced.
Despite the disappointing figures, the report also included upbeat news for investors. This included a preview of a ride-hailing app set to be integrated into Tesla products. The company revealed plans to bring new vehicle models to the market sooner than anticipated, citing the development of its robotaxi network.
Over the past three months, Tesla has doubled its AI computing capacity (smart software complexity) and invested $1 billion in AI infrastructure during the same period.
Thomas Monteiro, senior analyst at the company, mentioned that Tuesday’s report and Tesla’s plans to accelerate the development of more affordable vehicles helped alleviate some concerns among investors. “This announcement suggests that Elon [Musk] may refocus on the EV giant, which is positive news for shareholders,” he stated.
The earnings report was Tesla’s second since the launch of the Cybertruck, its long-awaited electric pickup truck. It was also the first report after the vehicle’s recent recall. The company faced challenges with the futuristic steel car, including a voluntary recall due to reports of a loose accelerator pedal potentially causing vehicles to become stuck when driving at full speed. Despite this, the company did not directly address the recall in its earnings release.
Even without the Cybertruck issues, Tesla has a tough year ahead as it announced a 10% reduction in its global workforce, affecting approximately 14,000 jobs. The company also slashed prices globally over the weekend. The entry of Chinese electric car manufacturers into the market has added to Tesla’s struggles in recent quarters.
Tesla reported a decrease in car deliveries for the first time in four years in the last quarter. The company warned that the growth rate in car sales could be considerably lower compared to 2023.
Addressing concerns about his workload, Elon Musk stated during the earnings conference, “Tesla consumes the majority of my work time. I work every day. I will ensure that Tesla prospers.”
Source: www.theguardian.com
