Tesla has pledged to bring forward the launch of “more affordable” models of its electric vehicles, helping its stock recover some of its recent losses despite reporting a 9 per cent decline in first-quarter revenue amid a sharp fall in sales.
In a filing on Tuesday, the electric-car maker said it had “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″.
It added that these would include “more affordable” vehicles that could be produced on its existing manufacturing lines. Tesla shares rose more than 12 per cent in after-hours trading.
Chief executive Elon Musk said in January that Tesla was preparing to start production of a new lower-cost car next year, priced at $25,000 (€23,400) and dubbed Model 2. The stock had fallen on a Reuters report earlier this month that the project had been shelved, which Musk denied.
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‘I could have gone to California. At this rate, I probably would have raised about half a billion dollars’
On a conference call, Musk refused to be drawn on specific plans for an affordable “next generation vehicle” or how it would be produced using Tesla’s current infrastructure. He had previously said the Model 2 would require a new “revolutionary manufacturing system” at factories in Austin, Texas, as well as in Mexico.
Instead, Musk said more information would be given alongside an August announcement about “robotaxis” and sketched an ambitious vision for Tesla as an “AI and robotics company” based around its autonomous driving system and humanoid robots.
“If you value Tesla just as an auto company you fundamentally have the wrong framework. If you ask the wrong question, the right answer is impossible,” he said. “If somebody doesn’t believe Tesla is going to solve autonomy they should not be an investor in the company. And we will and we are.”
The results come at a turbulent time for Musk and the electric vehicle sector. Before Tuesday’s after-hours share price rise, Tesla stock had plunged more than 40 per cent since the start of the year after warning of slowing vehicle deliveries, eroding profit margins, a potential move of its incorporation to Texas from Delaware and revealing plans to cut more than 10 per cent of its workforce – at least 14,000 jobs.
Most big US carmakers have reported a drop in electric vehicle sales due to softening consumer demand, a shift in preference to hybrids and increased competition from low-cost options from Chinese brands.
“While Tesla has real issues to contend with, we believe the company’s long-term upward trajectory remains intact,” said Christopher Tsai of Tsai Capital, which holds Tesla stock. “The potential for high-margin autonomy revenue should not go unheeded.”
Absent the enthusiasm about a new vehicle line-up, the underlying financial performance remained disappointing. First-quarter revenue fell to $21.3 billion (€19.9 billion) from $23.3bn in the same period last year, missing analysts’ expectations for $22.3bn. That marks Tesla’s first year-on-year quarterly drop since the start of 2020.
Adjusted earnings per share almost halved from a year ago to 45 cents, versus estimates for 52 cents, and the carmaker reported a sixth consecutive quarter of declining gross margins. The closely watched financial metric fell to 17.4 per cent, down from a peak of 29.1 per cent in the first quarter of 2022. – Copyright The Financial Times
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