Tesla's Q1 2024 Revenue Drops 9% Amid Price Cuts and Delivery Challenges

Tesla reported a 9% drop in revenue for the first quarter of 2024, with automotive revenues declining 13% and revenue per car dropping nearly 5%. The electric vehicle maker cited price cuts on the Model 3 and Model Y as key factors in the revenue decline, which fell short of analyst expectations. Tesla's net income plunged 55% to $1.13 billion, and the company had a negative free cash flow of $2.5 billion.

Despite the disappointing financial results, Tesla announced plans to speed up the launch of new, more affordable electric vehicle models. CEO Elon Musk told investors that production of these less expensive vehicles could begin sooner than expected, possibly in late 2024 or early 2025. Musk emphasized Tesla's focus on developing autonomous vehicle technology and a robotaxi service.

Tesla faced numerous challenges in the first quarter, including the Red Sea conflict, an arson attack at Gigafactory Berlin, and the gradual ramp of the updated Model 3 at its Fremont factory. The company also noted that global EV sales continue to be under pressure as many automakers prioritize hybrids over EVs. Tesla delivered 386,810 vehicles in Q1 2024, down 20% from the previous quarter and 8.5% fewer than Q1 2023.

Why this matters: Tesla's revenue drop and profit decline highlight the challenges facing the electric vehicle industry as competition intensifies and demand slows. The company's plans to introduce more affordable models and focus on autonomous technology underscore the shifting strategies in the EV market.

In response to the financial pressures, Tesla announced a 10% reduction in its global workforce and a restructuring that puts autonomy in sharp focus. Musk defended Tesla's commitment to the electric car market and its Full Self-Driving (FSD) program, arguing that the company should be considered an AI technology company. Tesla's shares surged over 7% in after-hours trading as the company pledged to speed up the launch of new models.

Key Takeaways

• Tesla Q1 2024 revenue down 9%, auto revenue down 13%, net income down 55%.
• Tesla to accelerate launch of more affordable EV models, possibly by late 2024/early 2025.
• Tesla faced challenges including Red Sea conflict, Gigafactory Berlin arson, and global EV sales pressure.
• Tesla delivered 386,810 vehicles in Q1 2024, down 20% from previous quarter and 8.5% from Q1 2023.
• Tesla announced 10% global workforce reduction and restructuring to focus on autonomous technology.