Turnover down 9% year-on-year in the first quarter, to $21.3 billion (20 billion euros), net profit down 55% – more than expected – to $1.1 billion , free cash flow became negative, cash flow having fallen by $2.5 billion (to $26.8 billion), automobile deliveries falling 8.5% year-on-year… and yet, Wall Street is is clinging to Tesla’s promise to launch less expensive products in 2025 to make the stock soar. The stock, which had lost more than 40% since the start of 2024, jumped 10% – around $160 – in trading following the market close on Tuesday April 23.
After a disastrous quarter, stock marketers dream of believing in the lucky star of Elon Musk who made their fortune, but is going through a period as difficult as in 2018, when his company, struggling to move into mass production, had come close to bankruptcy. The boss of the American automobile manufacturer repeated to financial analysts on Tuesday that he believed that electric vehicles continued to embody the future.
He announced that his new products would be “manufactured much more efficiently on [ses] current production lines » without having to create a new factory. And wanted to inspire dreams about autonomous driving and robot taxis using artificial intelligence (AI). “If anyone thinks Tesla can’t solve the autonomy problem, they shouldn’t be an investor in the company”, the leader said. “While many are reducing their investments, we are investing in future growth,” Tesla said in a press release. “The future is not only electric, but also autonomous. »
Mass layoffs
An optimistic speech delivered by Elon Musk with difficult speech, as often, but which the firm needed. The first quarter of 2024 is catastrophic for the brand, which suffers from hypercompetition from electric vehicles on the global market. It had to slash its prices and sacrifice its margins, including in China, in order to maintain its market share and benefit from public subsidies which did not apply to overly expensive models. It also suffered from transport disruptions in the Red Sea and the shutdown of its Berlin factory, the victim of an arson attack in early March.
Deliveries of its futuristic vehicle, the Cybertruck, are struggling to ramp up due to technical production difficulties in the Austin (Texas) factory and the model is experiencing problems which have led to the recall of 3,900 copies. The manufacturer is also affected by the political escapades of Elon Musk, who is drifting towards the far right while his vehicles are supposed to attract eco-conscious people. Certainly, it controls more than half of the American market, but the drop is clear compared to 75% two years ago. Finally, Mr. Musk’s compensation, set at $56 billion, was canceled by a Delaware judge, and shareholders will have to decide whether or not to renew it.
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