Tesla’s net profit in the first quarter of the year plunged 55%, but its stock price rose in after-hours trading Tuesday after the company announced it will accelerate production of new, more affordable vehicles.
The Austin, Texas, company reported that it earned $1.13 billion from January to March, compared to the $2.51 billion it generated in the same period last year.
Investors and analysts were looking for signs that Tesla will take steps to stem its stock decline this year and boost sales. The company did that in a letter sent to investors on Tuesday, noting that production of smaller, more affordable models will begin earlier than planned.
The smaller models, which apparently include the Model 2 small car expected to cost around $25,000, will use a next-generation chassis and some features from the current models. The company noted that they would be built on the same assembly lines as its current products.
In a conference call with analysts, CEO Elon Musk said he expects production to begin in the second half of next year, “if not later this year.”
No new factories or massive production lines will be needed for the new vehicles, Musk said.
“This update may result in less cost reduction than anticipated, but allows us to prudently increase our vehicle volumes in a more capital-efficient manner in times of uncertainty,” the letter sent to investors states.
But Musk did not give many details about what the new vehicles will be like and whether there will be variants of the current models. “I think we’ve already said everything we’re going to say about it,” he told one analyst.
He noted that he expects Tesla to sell more vehicles this year than the 1.8 million in 2023.
Tesla shares rose 11% after the close of trading on Tuesday, but have lost more than 40% this year.
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2024-04-30 18:34:51