Tesla shares rose after CEO Elon Musk announced that the company aims to begin producing affordable electric vehicle models by early 2025, or perhaps later this year. Shares rose about 12% in premarket trading Wednesday. This recovery came despite dismal earnings, including a 55% drop in first-quarter net income.
CNBC report Despite Tesla’s disastrous first quarter, in which sales fell 9% from a year ago to $21.3 billion and fell short of analysts’ expectations, the electric car maker’s stock experienced a significant rally after the earnings release. The sharp decline in sales since 2012 is thought to be due to continued price reductions and intensifying competition in the global EV market.
Tesla Fire in Australia (Penrose Rural Fire Department)
Musk revealed during the earnings call that Tesla plans to accelerate the launch of new vehicles, including more affordable models that can be produced on the same manufacturing lines as the company’s current lineup. The news came as a surprise, as Tesla had previously expected to begin production of the new model in the second half of 2025.
The company’s first-quarter auto sales fell 13% year over year to $17.38 billion, and net income fell 55% to $1.13 billion. Tesla’s gross profit also plummeted 18%, due in part to price cuts implemented earlier this year to stimulate demand.
Despite the challenges, Musk is optimistic about the future, saying he is in talks with “one major automaker” to license the driver assistance system, which is sold as a fully self-driving (FSD) option in the United States. Stated. He also highlighted his investment in Tesla. He expressed confidence that there will be significant improvement in the second quarter.
Tesla’s energy division sales rose 7% year over year to $1.64 billion, while services and other sales rose 25% to $2.29 billion. However, the company reported negative free cash flow of $2.53 billion due to $2.7 billion in inventory growth and $1 billion in capital spending on AI infrastructure.
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Lucas Nolan is a reporter for Breitbart News covering free speech and online censorship issues.
