TESLA reported a big drop in quarterly profit on Tuesday, indicating intense pressure on the electric vehicle market that has resulted in deep cost cuts.
Elon Musk’s electric car company reported profits of US$1.1 billion, down 55% from the year-ago quarter on revenue of US$21.3 billion, down 9%.
After enjoying rapid growth for much of 2022 and 2023, the electric car maker has faced a tougher market in recent months as more competitors have introduced competing electric cars, forcing Musk to make several price cuts in the past year.
The company, which recently announced plans to lay off more than 10% of its staff, has also issued a recall of its Cybertruck due to acceleration issues.
Tesla is committed to “company-wide cost reduction” as part of efforts to achieve “profitable growth,” it said.
Despite the belt-tightening implied by the statement, Tesla’s report provided some news that might please investors, stating that the company plans to “accelerate the launch of new models ahead of our previously communicated start of production in the second half of 2025.”
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The new vehicles will include “more affordable models,” Tesla said.
The statement comes amid speculation that Tesla is delaying plans for the “Model 2,” the unofficial name of what is expected to be a more affordable vehicle for the masses.
Tesla shares rose 6.0% in following-hours trading. (AFP/Z-3)
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