Tesla Q1 results: Net profit drops 55% to $1.13 billion, revenue falls 9% YoY; shares rally on new affordable EV plan

Tesla reported a sharp drop in quarterly profits, while its revenue fell for the first time since 2020, but Tesla share price rallied after its CEO Elon Musk pledged to accelerate plans for a more affordable EV.

Tesla’s net profit in the first quarter ended March 2024 stood at $1.13 billion, falling 55% from $2.51 billion a year earlier amid an increasingly cutthroat electric vehicle (EV) market. 

The Elon Musk-led EV manufacturer’ revenues for the three months ended March dropped 9% to $21.3 billion from $23.33 billion, YoY, as the company described EV sales as “under pressure.” Analysts on average had estimated $22.15 billion, according to LSEG data.

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The average revenue per vehicle delivered in the quarter fell by nearly 5% from a year ago to $44,926 a vehicle, reflecting the impact of repeated price cuts.

Tesla share price

Tesla share price jumped more than 13% in after-hours trading after the company pledged to “accelerate” new more affordable EVs.

Tesla said it planned to “accelerate the launch of new models ahead of our previously communicated start of production in the second half of 2025.”

At the outset of conference call on Tuesday, Tesla CEO Elon Musk said production on the vehicles would start in early 2025 or in late 2024, up from the prior timeframe of the latter half of 2025, AFP reported.

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Tesla also announced it will lay off more than 10% of its global workforce and slash vehicle prices in major markets such as the United States, China and Europe.

Cutting headcount by more than 10% will save Tesla more than $1 billion annually in costs, said Chief Financial Officer Vaibhav Taneja on a conference call with analysts.

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(With inputs from AFP)