Tesla recently announced a 9% drop in revenue for the first quarter and an ongoing depreciation of its profit margins due to a significant slump in its vehicle sales. Its Tuesday report indicated that earnings fell to $21.3 billion, down from $23.3 billion the previous year. This result didn’t meet the expected revenue of $22.3 billion predicted by financial analysts. For the first time since 2020’s opening quarter, a year-on-year quarterly decrease has been recorded. Despite these figures, Tesla stocks surged by 6% in after-hours trading.
These less than satisfactory earnings come during a tumultuous period for the CEO, Elon Musk. This year alone, Tesla’s shares have tumbled by over 40% due to warnings of stagnating vehicle deliveries, a possible change of registered company address from Delaware to Texas, and the announcement of an over 10% workforce reduction, resulting in at least 14,000 potential job losses.
Earlier in the month, Tesla revealed January to March deliveries of 386,810 electric cars, a reduction of 20% compared to the last quarter and 8% compared to the same time in 2023. Concurrently, Tesla has repeatedly slashed prices for its best-selling models due to an escalation in excess inventory.
Nevertheless, the company committed to speed up the introduction of new models before its initially-stated production launch in the latter half of 2025. This includes the production of more cost-effective vehicles.