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Tesla Falls Short in First Quarter, Sees Profit Drop 55%

by | April 23, 2024

For the first quarter of this year, Tesla delivered fewer vehicles and made less money than it did at this time last year. The company’s net income fell 55% and revenue slid 9% despite EV sales being up for other automakers during the period.

Lower sales results in the first quarter contributed to the massive drop in Tesla’s net income.

The report came as the automaker revealed plans to lay off thousands more employees globally. To help offset problems — and fend off a potential panic — the company noted it was accelerating its timeline for new products, including “more affordable models.”

“We have updated our future vehicle line-up to accelerate the launch of new models ahead of our previously communicated start of production in the second half of 2025,” the company said in earnings report.

“These new vehicles, including more affordable models, will utilize aspects of the next generation platform as well as aspects of our current platforms, and will be able to be produced on the same manufacturing lines as our current vehicle lineup.”

The numbers

Tesla Model Y - front 3-4 by water

Tesla said it plans to accelerate the timeline for its future products.

The company reported revenue of $21.3 billion during Q1, including $17.4 billion in automotive revenue, which was down 13%. Tesla’s adjusted earnings were $3.4 billion, a decline of 21%. Its adjusted earnings margin came in at 15.9%, down 240 basis points, from 18.3% for the same period in 2023. The company’s total gross margin was 17.4% compared to 19.3% in Q1 2023.

Operating income was $1.2 billion resulting in an operating margin of 5.5%, which was down from 11.4% from the first quarter last year.

Tesla’s net income fell to $1.1 billion from $2.5 billion, and its earnings per share was 34 cents compared with 73 cents for the year-ago period.

One driver of the lower results was slow deliveries during the first quarter. The company delivered 386,801 vehicles in Q1, which was down from the 422,875 vehicles in Q1 2023, a drop of 9%. All of that was in Model 3 and Model Y, which were down 10% for the first three months.

Tesla Model Y - with surfboard

The Tesla Model Y is the most popular vehicle in world, but it wasn’t enough to off-set a slew of issues.

What happened

A reason for the decline in volumes, according to Tesla, was the early phase of the production ramp up of the new Model 3 at the company’s Fremont (California) plant as well as shutdowns at Gigafactory Berlin due to shipping diversions related to the Red Sea conflict and the arson attack on the plant in Germany.

The company’s plants in California as well as China saw production slow during the quarter. China saw the Shanghai plant shutdown due to the Chinese New Year, but officials expect to see demand increase throughout the year — a traditional pattern.

Officials said the company is “between two major growth waves.” The first one was the global expansion of the Model 3 and Model Y. The next wave is expected to be technology driven, i.e. robotaxis.


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