Tesla’s First Quarter Earnings Plunge, But Promises of Cheaper Model Ahead
Despite reporting a 48% plunge in adjusted earnings for the first quarter, Tesla remains optimistic about its future plans, including the launch of a cheaper model next year.
The electric carmaker disclosed a 9% decline in total revenue, failing to meet Wall Street’s revised forecasts. Additionally, its profit margin dipped by 2 percentage points.
However, Tesla reassured investors by confirming its intention to proceed with a lower-priced model, scheduled for production in the latter half of 2025.
Although specifics about the upcoming model were scarce, Tesla CEO Elon Musk’s announcement contrasted recent reports suggesting the company might abandon the project altogether.
Musk, while discussing the new model, diverted attention to Tesla’s broader technological ambitions, including advancements in artificial intelligence, self-driving technology, and plans for humanoid robots. He emphasized Tesla’s vision of a future dominated by autonomous vehicles and AI-driven innovations.
Despite the lacklustre financial performance, Tesla’s shares surged by 11% in after-market trading, indicating investors’ confidence in the company’s long-term prospects.
Tesla’s recent struggles include a decline in global sales, staff cuts, and a series of price reductions, contributing to a 42% decrease in its stock value this year. The company faces intensified competition from both established automakers and Chinese counterparts, posing challenges to its market dominance.
The first quarter saw Tesla’s adjusted net income at $1.5 billion, falling short of analysts’ expectations. The company also reported a negative cash flow of $2.5 billion, attributed to various challenges, including supply chain disruptions and geopolitical conflicts.
Despite these setbacks, Tesla remains focused on innovation and expansion, aiming to reinforce its position in the rapidly evolving electric vehicle market.
