Tesla’s woes to start 2024 are many and ongoing — but that doesn’t mean the world’s most valuable automaker is stopping. Tesla stock soared as high as 16% in after-hours trading Tuesday, after Elon Musk’s electric vehicle company reported quarterly earnings that revealed a 9% year-over-year revenue decline — its biggest drop since 2012.
The Austin, Texas-based Tesla blamed its weak earnings on “numerous challenges,” including conflict in the Red Sea, an arson attack at its Gigafactory in Berlin, production costs, and waning consumer demand for EVs.
Tesla also missed Wall Street’s expectations, even after a brutal stretch that included mass layoffs and price cuts. The EV maker reported revenue of $21.3 billion for the first quarter, or about 45 cents per share. Analysts had forecast that it would report $22.15 billion in revenue, about 51 cents per share.
But Tesla stock — which is down almost 42% so far this year and one of the worst performers in the S&P 500 to start 2024 — nevertheless surged following Musk’s promise that the company would start making a cheaper new electric vehicle by early next year. The stock was still up more than 11% in after-hours trading by mid-evening.
“We have updated our future vehicle line-up to accelerate the launch of new models ahead of our previously communicated start of production in the second half of 2025,” Tesla said. Musk laid out a more ambitious timetable during an earnings call, telling investors that Tesla “expects it to be more like early 2025 if not late this year.”
Tesla plans to make the new vehicles more affordable, Musk said, noting that production is “not contingent on any factory or massive production line.”
“It’ll be made on our current production lines much more efficiently,” Musk said.
Cheaper EVs may be more expensive for Tesla in the long run, and the company is mulling the potential toll. “This update may result in achieving less cost reduction than previously expected but enables us to prudently grow our vehicle volumes in a more capex efficient manner during uncertain times,” Tesla said.
Tesla’s bid to produce more budget-friendly EVs may be driven in part by a slowdown in global demand for electric cars, as consumers opt for hybrids and less expensive EVs.
“Global EV sales continue to be under pressure as many carmakers prioritize hybrids over EVs,” Tesla said.
The earnings release followed a terrible week for the company marked by sweeping layoffs. The company has seen the resignations of two top leaders, poor first quarter sales, and changes in strategy related to a long-promised affordable electric car — the Model 2 — in favor of a self-driving robotaxi.
Musk has looked to reset the narrative, boasting on X earlier Tuesday than Tesla’s Model 3 is “quicker than Porsche 911.”
And Tesla said it plans to continue pouring money into its AI training infrastructure, charging networks, and new EV fleets.
During the company’s earnings call, Musk hinted that it plans to showcase its robotaxi in August. Musk said the long-promised robotaxi — which continues to generate considerable skepticism — would be able to operate for almost 50 hours without having to stop to re-charge.
Vaibhav Taneja, Tesla’s chief financial officer, told investors during the earnings call that cutting its workforce by more than 10% is expected to generate savings of more than $1 billion annually. Taneja compared the layoffs to pruning a tree.
“Any tree which grows, it needs pruning,” Taneja said. “This is the pruning exercise, and at the end of it, [Tesla] will be much stronger and much more resilient to deal with the future.”