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Tesla rebounds on the stock market with its ‘promise’ of cheaper cars after its sales drop

Date: July 12, 2024 Time: 16:56:24

Tesla, the American electric vehicle manufacturer, is ending a period of high growth with its worst results in more than a decade due to the accelerated decline in profits, margins and sales. The leader in the electrified car segment joins the wave of manufacturers in trouble due to the slowdown in global demand.

However, the company’s shares soared 13% on the stock market ‘after hours’ after presenting its accounts on Tuesday night, after its CEO, Elon Musk, previously promised analysts and investors a immediate shift towards the manufacture of cheaper cars from 2025.

The automaker is accelerating the launch of larger vehicles in a bid to revive waning demand after another disappointing quarter. Tesla said it aims to start production of new models as soon as this year, well ahead of the previously promised deadline of late 2025. The news overshadowed a large shortfall in Tesla’s first-quarter profits, sales and margins.

Musk believes future lower-priced models will spur demand for electric vehicles, which is slowing globally despite the price war. “What matters is that investors have some spark of hope that growth will accelerate again next year. For the believers, it gave them enough to keep going,” said Gene Munster, managing partner at Deepwater Asset Management, in a comment to Bloomberg after seeing the accounts.

Profits collapse

Tesla, the American electric vehicle manufacturer, recorded an attributable net profit of $1,129 million in the first quarter of this year, marking a 55% drop from $2,513 million in the same period in 2023, according to filings. . . The company’s operating margin closed the first quarter at 5.5%, decreasing 5.9 percentage points compared to the previous year, when it reached 11.4%.

Tesla’s revenue fell to $21,301 million in the first quarter, showing a 9% decrease compared to the $23,329 million generated between January and March 2023. Adjusted Ebitda for March was $3,384 million, representing a drop of 21% compared to the $4,267 million in the first quarter of 2023.

Tesla attributes this reduction in sales volumes to the upgrade of the Model 3 production line at the Fremont, California factory, and to factory closures resulting from shipping shipments due to the conflict in the Red Sea and an incident in the Berlin Gigafactory, according to the results report.

* This website provides news content gathered from various internet sources. It is crucial to understand that we are not responsible for the accuracy, completeness, or reliability of the information presented Read More

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.
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