After years of rapid growth, Tesla is now facing weaker demand and growing competition from China. picture alliance / ASSOCIATED PRESS | Kirsty Wigglesworth
Tesla boss Elon Musk presented the automaker’s quarterly results on the night of Tuesday to Wednesday.
The company recorded a decline in sales for the first time. The reason for this are delivery and production problems.
Elon Musk says they want to bring cheaper models onto the market more quickly in order to reverse the trend.
Tesla CEO Elon Musk presented the company’s eagerly awaited quarterly results on the night of Tuesday to Wednesday. Analysts previously described the publication of the financial results as a “moment of truth” as the company has recently been under increasing pressure.
In fact, Tesla reported a decline in sales last quarter for the first time in almost four years. Revenues fell by nine percent compared to the previous year to $21.3 billion (19.9 billion euros), as the company announced after the US stock market closed on Tuesday. This was below the expectations of analysts, who on average had expected sales of $22.15 billion. Earnings per share also fell short of market expectations, with quarterly profit falling 55 percent to $1.13 billion (1.06 billion euros).
However, the declines were expected. It was already known that Tesla only delivered 387,000 vehicles in the first quarter – significantly fewer than a year ago. This corresponds to a decline of 8.5 percent compared to the previous year and a slump of 20 percent compared to the last quarter of 2023. Tesla cited, among other things, the temporary suspension of production at the Grünheide plant near Berlin after an attack on the power supply as a reason for its first quarter results.
Tesla initially did not provide a specific forecast for deliveries for the current year, but expects the pace of growth to slow compared to 2023. However, CEO Elon Musk emphasized in a conference call with analysts that he still expects an increase in sales. The stock rose in after-hours trading at times by more than seven percentafter falling more than 40 percent since the beginning of the year.
Cheaper Tesla models coming soon
The reason for the lack of loss in value of the share is probably Tesla’s announcement that cheaper models should go into production before the second half of 2025. The electric car pioneer is under increasing pressure from cheaper competition from China and buyers’ growing interest in hybrid vehicles. Musk continues to emphasize that the future belongs exclusively to electric drives and promises that Tesla will change the industry with self-driving cars.
However, Musk did not provide any information about when and at what price the cheaper Teslas would come onto the market. The question of whether these will be completely new models or adapted versions of the previous bestsellers Model 3 and Model Y also remained unanswered while he spoke to analysts in a conference call.
Read too
Elon Musk is laying off Tesla’s 40-person marketing team in the US just four months after it was founded
The advanced timeline of the cheaper models contradicts previous speculation about the company’s plans to introduce a lower-cost model. Musk recently announced the launch of robotaxis on August 8th, but did not mention a cheaper model for human drivers.
After years of rapid growth, the company is now facing weaker demand and growing competition, especially from China. CEO Elon Musk has already cut more than one in ten jobs. Nevertheless, Tesla again reduced the prices for some model variants over the weekend.
/dpa