Tesla Posts Biggest Revenue Drop Since 2012

Tesla’s first quarter financial results have revealed the scale of the problems currently facing the EV maker and its CEO Elon Musk.

Tesla’s Q1 regulatory filing showed that profits have fallen 55 percent, and revenues have experienced their largest decline since 2012.

It comes the company last week announced its biggest-ever round of layoffs, affecting more than 10 percent of staff worldwide (or 14,000 jobs).

The layoffs came as the EV giant seeks to revive a record-breaking $56bn pay package for Musk that a Delaware judge had voided in January, ruling that the board of directors had acted as “supine servants” to the chief executive.

Financial results

So exactly how bad was Tesla’s first quarter?

Well for the first quarter ending 31 March 2024, Tesla posted a net profit down 55 percent at $1.13bn, well short of the net profit of $2.5bn in the same year-ago quarter.

There was also similar news regarding revenues, which were down 9 percent at $21.3bn, from $23.3bn in the same year-ago quarter.

Wall Street had been expecting revenues of $21.48bn.

Tesla shares however still surged 10 percent after the revenue miss, after the company said in an earnings call that it expects to release new vehicle models sooner than expected.

Elon Musk at the weekend had cut Tesla prices in US, China, Germany, other major markets as it faces intensifying competition and slowing sales.

Last weekend Musk had also postponed a trip to India, citing obligations at Tesla. Musk was expected to meet with prime minister Narendra Modi and to announce plans to expand in the South Asian country after its government conditionally lowered import taxes for electric vehicles.

Cybertruck issues

Overall Tesla’s stock is down 43 percent so far this year, partially trimming gains from a huge surge that began in 2020, amidst concerns over delivery slowdowns, larger inventories and a recall of all of the nearly 4,000 Cybertrucks that Tesla has delivered to date over a safety issue affecting accelerator pedals.

A new quality issue has also emerged regarding cybertrucks, with owners complaining of the stainless steel body rusting.

Another cybertruck was recently ‘bricked’ after the driver failed to put the vehicle into ‘car wash mode’ before taking it through a normal car wash.

Tesla’s poor financial results comes amidst intensifying competition, particularly from Chinese firms including BYD, Nio and Li Auto, with BYD temporarily taking Tesla’s top spot as the world’s biggest electric vehicle maker in the fourth quarter.

Cheaper models

Tesla and Musk however remains bullish.

According to the Guardian newspaper during an earnings call Musk touted previews of a ride-hailing app to be integrated into Tesla products.

The EV maker also said it was hoping to accelerate the production of lower-priced EVs, with production of the first cars beginning as early as this year.

Tesla also reportedly said it had updated its future vehicle lineup “to accelerate the launch of new models ahead of our previously communicated start of production in the second half of 2025”.

These would include new “more affordable” vehicles, it added.

In the call with investors, Musk clarified that this would probably mean production starting “by early 2025, if not late this year”.

Tesla however gave very few details on the design and specifications of the new cars, and Musk reportedly appeared reticent when asked about whether the new vehicles would be all-new, or tweaks to existing models.

The cheapest of the current Model 3 vehicles has a starting price of about $39,000.

Tesla also referenced a robotaxi network in the works during the earnings call.