Tesla’s long-term price-cutting strategy and several «unforeseen problems» reduced its profits — in the first quarter, the company earned $1.13 billion (55% less than last year).
The company’s total revenue also showed a 9% decline to $21.3 billion.
During the report, Tesla noted that it faced «numerous challenges in the first quarter» — including the conflict in the Red Sea, the arson attack on Gigafactory Berlin, and the gradual development of the updated Model 3 at its Fremont plant. The company also adds that global sales of electric vehicles continue to be under pressure as many automakers are opting for hybrid vehicles. On the other hand, this approach means that they continue to buy regulatory credits
Automakers that do not fit into the environmental regulations of countries and want to avoid problems with regulators are forced to buy so-called regulatory credits from other companies that meet the requirements — for example, from Tesla, which produces exclusively electric cars — Musk’s company earned $422 million on this.
«The development of electric vehicle adoption worldwide is under pressure, and many other automakers are abandoning electric vehicles and focusing on hybrids instead. We believe that this is not the right strategy, and electric vehicles will eventually dominate the market,» Tesla CEO Elon Musk said during the report.
At the same time, Tesla’s shares rose by 12% after the financial results were released, probably because investors were interested in the company’s comments on future products (in particular, plans to launch several cheaper cars in early 2025).
«These new vehicles, including the more affordable models, will use aspects of the next-generation platform as well as aspects of our current platforms,» Musk said. «And we’ll be able to produce them on the same production lines where we build our current lineup of vehicles».
Tesla’s electric vehicle sales have grown over the past few years, reaching a new a record of 1.8 million units in 2023. In the first quarter of 2024, the company delivered 386,810 vehicles (20% less compared to 484,507 vehicles delivered in the last quarter of 2023 and 8.5% less than in the first quarter of 2023).
Currently, the company’s only new model — expensive (and demanding) CybertruckThe automaker also released new variations of current models, including the Tesla Model 3 Performance. During a report in January, Musk said that production of a smaller and cheaper electric car would begin in late 2025 at the company’s plant in Texas, and later expand to a yet-to-be-built plant in Mexico. Three months later, the plans seem to have changed in favor of the Robotaxi (built on the platform for the cheaper $25,000 car), which is likely to be unveiled in August.
A few weeks ago, Tesla reduced 10% of the staff and engaged in a restructuring aimed at autonomy. Two senior executives — Drew Baglino, senior vice president of powertrain and energy at Tesla, and Rohan Patel, vice president of public policy and business development — have also left the company. Tesla’s CFO Vaibhav Taneja expects the savings from the workforce reduction to exceed $1 billion a year.
Source: TechCrunch