Achi news desk-
Tesla profits fall by more than half
Tesla has announced that its profits fell sharply in the first three months of the year to $1.13bn (£910m), compared to $2.51bn in 2023.
It brings an end to a difficult period for the electric vehicle (EV) manufacturer, which – in the face of falling sales – has announced thousands of job cuts.
Boss Elon Musk remains bullish on his outlook, telling investors that the launch of new models would be delivered.
Its share price has risen but analysts say it continues to face significant challenges, including from lower-cost rivals.
The company has suffered from a drop in demand and the competition due to cheaper imports from China which has led to a 43% fall in its stock price over 2024.
First quarter 2024 figures revealed revenue of $21.3bn, down on analyst predictions of just over $22bn.
But Tesla’s decision to introduce the launch of new models from the second half of 2025 boosted its shares by almost 12.5% ​​in after-hours trading.
He did not disclose the pricing details of the new vehicles.
However, Mr Musk made it clear that he also had grand ambitions, pointing to Tesla’s AI credentials and plans for self-driving vehicles – even going so far as to say that the “wrong framework” was just a car company.
“If someone doesn’t believe that Tesla is going to solve autonomy I think they shouldn’t be an investor,” he said.
However, analysts have questioned such sentiments, with Deutsche Bank saying driverless cars face “technological, regulatory and operational challenges.”
Some investors have called on the company to focus instead on releasing a lower-priced, mass-market EV.
However, Tesla has already been on the offensive, trying to win over new customers by dropping its prices in a series of markets in the face of falling sales.
He also said his situation was not unique.
“Global EV sales remain under pressure as many automakers prioritize hybrids over EVs,” he said.
Despite plans to introduce new models originally planned for next year the company is cutting its workforce.
Tesla said it would cut 3,332 jobs in California and 2,688 jobs in Texas, starting in mid-June.
The cuts in Texas represent 12% of Tesla’s total workforce of nearly 23,000 in the area where its gigafactor factory and headquarters are located.
However, Mr Musk tried to downplay the move.
“Tesla has now created over 30,000 manufacturing jobs in California!” he said in a post on his social media platform X, formerly Twitter, on Tuesday.
Another 285 jobs will be lost in New York.
Tesla’s total workforce was more than 140,000 late last year, up from about 100,000 at the end of 2021, according to the company’s filing with US regulators.
Musk’s salary
The car company also faces other problems, with a battle over Mr Musk’s compensation still raging.
On Wednesday, Tesla asked shareholders to vote on a proposal to accept Mr Musk’s compensation package – once worth $56bn – which had been rejected by a Delaware judge.
The judge found that Tesla’s directors had breached their fiduciary duty to the company by awarding the payment to Mr Musk.
Due to the drop in Tesla’s stock value, the compensation package is now estimated to be around $10bn less – but still more than the GDP of many countries.
In addition, Tesla wants its shareholders to agree to the company being moved from Delaware to Texas – which Mr Musk called for after the judge refused his payday.
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