Tesla reported first-quarter earnings that were even lower than expected, but its commitment to developing affordable cars boosted its stock price nearly 10 percent after markets closed.
Its first-quarter revenue was $21.3 billion, below Wall Street estimates of $22.3 billion and down 9 percent from the $23.3 billion it earned in the same quarter last year, the company reported. company on Tuesday afternoon.
It was the steepest year-on-year drop since 2012.
However, an hour after reporting the results, Tesla’s share price rose more than 9 percent to around $158. Its closing price was around $145.
Another piece of good news was that the company produced 1,000 Cybertrucks in one week in April, a sign that it will be able to ramp up production to meet demand.
Tesla reported even lower-than-expected first-quarter earnings
In after-hours trading, Tesla’s share price rose more than six percent after the company guaranteed affordable cars in the near future.
It also said it would bring forward production of more affordable cars, critical if the company is to grab a lucrative share of the mass market.
“We have updated our future vehicle range to accelerate the launch of new models ahead of our previously communicated start of production in the second half of 2025,” the report reads.
“These new vehicles, including more affordable models, will use aspects of the next-generation platform, as well as aspects of our current platforms, and can be produced on the same manufacturing lines as our current vehicle range.”
Musk also shared on X that he sees autonomous taxis, or robotaxis, as a crucial market for Tesla. Earlier this month he announced a performance on August 8.
The electric vehicle maker’s stock price had fallen about 40 percent this year, making it one of the worst-performing companies in the S&P 500.
What exacerbated concerns among investors was that the company reportedly canceled its project to build the ‘Model 2’. The car was rumored to cost around $25,000 and for many analysts it was a vital product for Tesla to enter the mass market.
Earlier this month, the company also reported delivery numbers for the quarter, which came in well below expectations and hinted that revenue would not be strong.
It delivered 386,810 vehicles in the first three months of the year, 20 percent less than the previous quarter and almost 9 percent less than in the same period in 2023.
Wedbush analyst Dan Ives described it as “a train wreck into a brick wall for Musk.”
An additional source of headache for Tesla this quarter comes from Chinese competition. While developing the Cybertruck, companies like BYD, Li Auto and Nio were focusing on affordable electric vehicles for the mass market.
They are now producing cars for as little as $10,000, about a third of the price of the cheapest electric car available in the United States.
An hour after reporting the results, Tesla’s share price rose more than 9 percent to around $158.
Chinese electric vehicle maker BYD recently launched the Seagull, which costs $9,700 in China. Tesla recently scrapped its plans to make a cheap ‘Model 2’ car for the mass market
In a bid to compete, Tesla this weekend began cutting the price of its cars around the world.
Tesla reduced the starting price of the Model 3 in China by 14,000 yuan, or $1,900, to 231,900 yuan, or $32,000, its official website showed on Sunday.
In Germany, the price of the rear-wheel drive Model 3 was reduced by 2,000 euros, to 40,990 euros, or about $43,600. There were also price cuts in many other countries in Europe, the Middle East and Africa, a Tesla spokesperson told Reuters.
The Cybertruck has also been a cause of concern among investors. This unconventional vehicle has little in common with typical cars and features many expensive details, such as its stainless steel body panels.
Then last week, the automaker recalled nearly 4,000 Cybertrucks to fix an accelerator pedal fault that could cause the electric vehicle to accelerate to full speed.