Tesla's net profit for Q1 drops by 55% to $1.13B
Tesla's net profit for the first quarter of 2024 plummeted to $1.13 billion, marking a significant 55% decrease from the $2.51 billion reported in the same period last year. The company attributed this downturn to intensifying competition in the electric vehicle (EV) market, describing its EV sales as being "under pressure." Despite these challenges, Tesla's share price saw a 13% increase in after-hours trading following an announcement of plans for more affordable EV production.
Tesla's revenues for Q1 2024 also fell by 9%
Tesla's revenues for Q1 2024 also took a hit, falling by 9% to $21.3 billion from $23.33 billion year-on-year (YoY). This was lower than the average estimate of $22.15 billion by analysts. In response to these financial challenges and the pressure on EV sales, Tesla announced plans to "accelerate the launch of new models ahead of our previously communicated start of production in the second half of 2025."
Tesla to lay off 10% of its global workforce
To manage costs, Tesla announced it would lay off more than 10% of its global workforce and reduce vehicle prices in major markets including the United States, China, and Europe. CFO Vaibhav Taneja stated on a conference call with analysts that these layoffs would save Tesla over $1 billion annually. Despite these measures, the company's gross profit margin dipped to 17.4%, down from its peak of 29.1% in Q1 2022 and 19.3% in 2023.
Tesla's Q1 sales dropped by 8.5%
Tesla's Q1 sales also dropped by 8.5%, reflecting the ongoing challenges faced by the company in the EV market. The EV maker's shares have dropped more than 40% this year. In a bid to boost future earnings, Tesla will unveil self-driving robotaxi on August 8. CEO Elon Musk is also expecting the company to sell more vehicles in 2024 than the previous year's figure of 1.8 million.
