Tesla shares rose nearly 10% in after-hours trading Tuesday after releasing earnings results, despite a revenue miss for the first quarter of 2024, a sharp drop in profits and a market recall of its most recently released car, the $100,000 Cybertruck.
The electric vehicle maker posted $21.3 billion in revenue, less than the estimated $21.48 billion and a 9% drop year over year, marking its biggest drop since 2012. Profits were $1.1 billion, a 55% decrease compared to the first quarter of 2023, the company said.
Still, the report offered encouraging announcements for investors, including previews of a ride-hailing app that will be integrated into Tesla products. The company said it hoped to launch new vehicle models sooner than previously announced and referenced a robotaxi network in the works.
It has more than doubled its AI computing (the complexity of its intelligent software) in the last three months and invested $1 billion in AI infrastructure over the same period.
Tuesday’s report – particularly Tesla’s plans to accelerate the development of lower-cost vehicles – has eased some of those fears, said Thomas Monteiro, senior analyst at Invest.com.
“The announcement also indicates that Elon [Musk] “We may refocus our efforts on the electric vehicle giant, which is another good news for shareholders,” he said. “It’s a promising sign for the company that it felt compelled to change its direction amid countless pressures.”
The earnings report was its second since the launch of the Cybertruck, Tesla’s long-awaited electric pickup truck, and its first earnings call since that vehicle was recalled last week. The futuristic steel car has had problems with other breakdowns. Tesla voluntarily issued a recall following reports that vehicles were at risk of getting stuck while driving at full speed due to a loose accelerator pedal. The company did not comment on the recall directly in its earnings report.
Even without the Cybertruck concerns, Tesla had been facing a difficult year and last week said it was cut 10% of its staff globally, about 14,000 jobs. Over the weekend, it cut its prices around the world. It has weathered a series of poor earnings reports in recent quarters as competing Chinese EV makers encroach on the EV market.
Last quarter, Tesla reported that vehicle deliveries had fallen for the first time in four years. In Tuesday’s report, Tesla said its vehicle volume growth rate “may be noticeably lower than the growth rate achieved in 2023.”
Musk continues to face criticism from investors who say he is stretched too thin after his purchase of Twitter, which he rebranded as Meanwhile, Tesla has asked its shareholders to vote in favor of Musk’s $56 billion pay package that was rejected by a judge earlier this year who called it an “unfathomable sum.”
Musk addressed those concerns directly on the earnings call, saying, “Tesla makes up the majority of my work time. I work every day of the week. “I will make sure Tesla is very prosperous.”