Tesla, the leader in electric vehicles, announced its first quarter financial report for 2024 today. It can be said that it was unsurprisingly bleak. However, Musk’s words turned the entire situation upside down, causing Tesla to surge by 13% in after-hours trading.
Tesla’s vehicle delivery volume in the first quarter of this year was lower than expected, and even experienced negative growth for the first time in four years. At the same time, it continued to cut prices to clear inventory. The combination of these two forces naturally made its profit performance very ugly. According to the latest financial report for the first quarter of 2024, total revenue this quarter was US$21.3 billion, down 9% from the same period last year; operating profit margin continued to decline, only 5.5%, and adjusted net profit before tax was US$3.38 billion. , an annual decrease of 21%.
(Source: Tesla)
Tesla did not give any redundant excuses and stated directly that due to the low number of vehicles delivered in the first quarter, price reduction factors and Model 3 production line adjustments, unexpected delays in the production capacity of the Berlin plant, and exchange rate factors , causing overall revenue to decline. At the same time, investments in AI R&D and Cybertruck production capacity improvements are quite high, causing overall profits to shrink.
Even before the financial report was released, most investors expected it to be not good, so Tesla’s stock price has been falling since last week, falling to a one-year low of $138. However, just after the financial report was released, Tesla CEO Musk (Elon Musk) said one sentence at the shareholders’ meeting, which cheered up the whole audience.
“We will accelerate the development process of affordable cars and launch them early,” Musk said. They will build new cars on existing factory production lines and debut them as soon as this year.
With this sentence, the mystery that has been plaguing Tesla investors for nearly a month can finally be dispelled. At the beginning of this month, Reuters quoted unnamed sources as saying that Tesla had canceled the affordable car project. This was later forwarded by many media, and Internet celebrities followed up the hype, causing the market’s confidence in Tesla to collapse. Although Musk has posted that “Reuters is lying again,” he himself did not directly explain the news. Instead, he said “Robo Taxi, see you in August,” making the whole incident even more confusing.
After Tesla’s affordable car was “again” finalized, many investors viewed the news positively. “He did not ignore the real challenges, but carried out it in the existing factory, which is a good thing.” Elliot Johnson, chief investment officer of Evolve ETF, believes that this means Tesla is not simply writing a blank check, but considering cost and technology. Face the reality and make the compromise.
Tesla officially stated that it would suspend plans for new factories in India or Mexico and focus on adjusting the production lines of existing factories. In this way, the “affordable car” will cost less than planned. However, the official did not specify the pricing, which is generally still priced at 25,000. USD is the standard.
“For investors, this at least sparks a glimmer of hope for growth next year.” Gene Munster, a partner at Deepwater Asset Management, pointed out that this news is enough for Tesla fans to continue to hold on to their stocks.
(First picture source: Tesla)
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