Elon Musk's EV maker saw its stock spike despite weak earnings as the company outlined plans to turn things around, which includes making cheaper EVs
Tesla $TSLA doesn’t seem to be able to catch a break right now. Whether it’s falling registrations as sales drop, or recalls of its flagship models, the electric vehicle maker is certainly having a time of it right now. This reached a head late Wednesday, when the company revealed that its profits were down an eye-watering 55% due to falling sales and lower costs for its cars.
Tesla revealed that it took in $21.3 billion in revenue during the first quarter of 2024, reports the Guardian. That income marked a 9% drop over the same period last year, and the company’s profits from the quarter hit $1.1 billion — 55% percent lower than the same period in 2024.
Despite the kinds of revenue cuts that would have most bosses fearing for their jobs, Tesla weirdly saw its share price surge following the investors call last night. That’s because the company outlined its ambitions to turn things around, which includes a renewed focus on artificial intelligence, autonomy and maybe even an affordable EV. As the Guardian explains:
Still, the report offered heartening announcements for investors, including previews of a ride-hailing app to be integrated into Tesla products. The company said it expected to release new vehicle models sooner than previously announced and referenced a robotaxi network in the works.
It has more than doubled its AI compute – the complexity of its smart software – in the past three months and invested $1bn on AI infrastructure during the same time period.
News of a more affordable Tesla was highlighted by the Verge, which said that the company planned to “introduce new and more affordable products.” A more budget-friendly Tesla would be part of the company’s next-generation lineup, which will use a new EV platform that shares some similarities to the company’s current platform, reports the Verge.
Many had feared that the affordable Tesla had been canned mere weeks ago, but the mention of it in Tuesday night’s earnings call was enough to calm investors.
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