The first decline in sales in four years, plus a drop in profits of around 40 percent compared to the previous year: TeslaShareholders had already braced themselves for the world’s most valuable car maker to present weak results on Tuesday.
The raw numbers were even worse than expected: Tesla reported sales of $21.3 billion for the first quarter, which was even less than analysts estimated ($22.2 billion). In the same quarter last year, Tesla had sales of around $23.3 billion.
Operating profit in the first quarter fell to $1.1 billion, compared to expectations of $1.6 billion. In the first quarter of 2023, Tesla still earned $2.6 billion from operations – so profits fell by more than half due to the discount battles. The gross margin is currently around 17 percent.
Tesla shares have been falling for months. The paper has already lost around 40 percent of its value since the beginning of the year. Immediately after the figures, however, the share price rose by more than 7 percent to 155 US dollars (144 euros) in after-hours trading, thus beginning to recover.
Cheap Tesla Model 2 is due to arrive at the end of 2025
The reason for the shareholders’ relief: The longed-for new models such as the inexpensive “Model 2” are expected to arrive earlier than planned. “We will accelerate our development so that new models can be produced and delivered as early as the second half of 2025,” Tesla announced on Tuesday evening. This announcement was already enough for the share price to gain significantly.
Hopes are primarily based on an affordable “Model 2,” which will cost around $25,000. With a cheap car, Tesla would be able to regain market share in China.
After rapid growth in recent years, the electric pioneer is primarily faced with weaker demand and growing competition China. Musk is cutting more than one in ten jobs. According to the latest information, around 400 jobs will be lost in Grünheide, the only European Tesla factory. Lowered over the weekend Tesla once again increased the prices for some models, including in Germany.
Tesla’s share price recently fell along with vehicle prices. This is currently at its lowest level in 15 months. With an annual decline of currently 40 percent, the electric car manufacturer’s stocks are among the weakest values in the Nasdaq 100 Index.