Tesla Q1 profits tumble but shares rise on new vehicle plan

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Tesla reported profits of $1.1 billion, down 55 percent from the year-ago quarter on revenues of $21.3 billion, down nine percent as the company described EV sales as "under pressure."

April 24, 2024 / 12:47 PM IST

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Tesla reported a big drop in quarterly profits Tuesday amid an increasingly cut throat electric vehicle market, but shares rallied as CEO Elon Musk pledged to accelerate plans for a more affordable EV.

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Tesla reported profits of $1.1 billion, down 55 percent from the year-ago quarter on revenues of $21.3 billion, down nine percent as the company described EV sales as "under pressure."

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Shares rocketed up more than 11 percent in after-hours trading after Tesla pledged to "accelerate" new more affordable autos -- something Wall Street analysts have been clamoring for.

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The results, which lagged analyst estimates, come as investors have sought greater strategic clarity from Musk amid a weaker performance and as the mercurial Tesla boss has touted Robotaxis as a venture at a time when there are increasing questions about the timeframe that autonomous technology will be commercially viable.

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The company, which recently announced layoffs of some 14,000 workers, has also undertaken a recall of its Cybertruck due to an acceleration problem.

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Cutting headcount by more than 10 percent will save Tesla more than $1 billion annually in costs, said Chief Financial Officer Vaibhav Taneja on a conference call with analysts.

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In spite of the belt-tightening, Tesla's report did provide some news likely to cheer investors, saying it planned to "accelerate the launch of new models ahead of our previously communicated start of production in the second half of 2025."

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The new vehicles will include "more affordable models," Tesla said.

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At the outset of Tuesday's conference call, Musk said production on the vehicles would start in early 2025 or in late 2024, up from the prior timeframe of the latter half of 2025.

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The vehicles "will use new aspects of the next generation platform as well as aspects of our current platform," Musk said. "So it's not contingent on any new factory or massive new production line." Musk declined to elaborate on the plan, saying more details would be released in August.

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