May 30, 2024

Tesla’s woes are on a tear but that doesn’t mean the world’s most valuable automaker is stopping.

Shares of Tesla popped by 16% in after hours after the electric vehicle company reported earnings that revealed its revenue had fallen to its lowest level since 2012.

Austin, Texas-based Tesla blamed its revenue miss 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 missed Wall Street’s expectations. The EV maker reported revenue of $21.3 billion for the first quarter, about $0.45 cents a share. Analysts had forecasted it would report $22.15 billion, about $0.51 cents a share.

But even so, Elon Musk’s Tesla is steadfast in its mission to push EVs into the mainstream.

“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, however, told investors during its earnings call that it “expects it to be more like early 2025 if not late this year.”

Tesla plans to make the new vehicles more affordable too, 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 in part be due to a slowdown in global demand as consumers opt for hybrids and less expensive EVs altogether.

“Global EV sales continue to be under pressure as many carmakers prioritize hybrids over EVs,” Tesla said.

Even as Tesla continues to navigate choppy waters, it is nonetheless investing in the future. Just today, Musk touted on X that its Model 3 was “quicker than Porsche 911.”

Moreover, 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. The cybercab is expected to operate for nearly 50 hours, he added, noting that it would have to stop operations to charge.

Vaibhav Taneja, Tesla’s chief financial officer told investors during its earnings call that cutting its workforce by more than 10% is expected to generate savings of more than $1 billion annually.

Taneja compared the reduction to a pruning tree.

“Any tree which grows, it needs pruning,” Taneja said in reference to the layoffs. “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.”

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *