The manufacturer Tesla, which announced on Tuesday a 55% drop in its net profit in the first quarter, aims to produce a low-cost electric vehicle “as quickly as possible”, an announcement that delighted the markets.
During a conference call with analysts, management indicated that the low-cost vehicle project would be accelerated to make it available “as soon as possible.”
Following these comments, Tesla shares soared more than 11% in electronic trading after the New York Stock Exchange closed.
For analysts, Tesla could find a second wind with this vehicle dubbed Model 2, which would sell for about $25,000.
According to Factset, the average price of all Tesla models combined was $42,110 in the first quarter, up from $46,000 a year earlier. A figure prior to the decreases announced over the weekend in Europe, the United States and China.
Price “is one of the biggest barriers. The industry needs more products under $30,000,” said Stephanie Valdez Streaty, director of Industry Insight at Cox Automotive.
Analysts were awaiting clarification from boss Elon Musk and the management team on the group’s strategy after a rather eventful month of April, punctuated by sporadic official announcements and speculation.
So many uncertainties that have caused its market capitalization to fall almost 40% since the beginning of the year.
Tesla lifted a corner of the veil on Tuesday, saying it had invested $2.8 billion in the first quarter in its artificial intelligence infrastructure, its manufacturing capabilities, its supercharger network and its new manufacturing infrastructure.
“Earlier”
“We have updated our vehicle schedule to accelerate the launch of new models that we had previously planned to begin production in the second half of 2025,” Elon Musk told analysts.
“Now we think that it will be at the beginning of 2025, if not at the end of this year,” he added, specifying that existing production lines would be used and that this should make it possible to reach an annual production capacity of three million vehicles.
The group also analyzed future advances in autonomy and the launch, among the new models, of the long-awaited low-cost car and Semi, its semi-trailer truck. Without forgetting its robotaxi, a 100% autonomous vehicle, which must be presented on August 8.
As for the latter, the goal is to start production at the end of 2025 for the first deliveries the following year.
Pending all of these projects and developments being completed, volume growth in 2024 should be “significantly lower” than in 2023, Tesla warned, noting that the EV market was still “under pressure.”
In addition to a less dynamic than expected electric vehicle market in the United States, Tesla also faces difficulties in China with strong competition from local manufacturers, even internationally.
BYD took the title of the world’s largest seller of electric vehicles in the fourth quarter.
“Correction period”
The honor is certain: the Tesla Model Y was the best-selling car in the world in 2023, a first for an electric vehicle.
But between January and March it delivered fewer vehicles than a year before and, above all, many fewer than expected by analysts. Production also disappointed, with a decline of 8.5% in one year.
In the first three months of the year, it achieved a turnover of 21.30 billion dollars (-9% year-on-year) and a net profit of 1.30 billion dollars (-55%).
Per share and excluding exceptional items, the preferred figure of the markets, the net profit amounted to 45 cents.
These results are lower than market expectations.
“Tesla is in a period of correction and will have to act cautiously if it wants to avoid a deeper decline in sales,” said Gadjo Sevilla, technology analyst at EMarketer.
Furthermore, regarding the layoffs announced on April 15, which should affect a total of about 14,000 people out of the group’s 140,000 employees (which has not confirmed these figures), Tesla was legally obliged to provide details.
It informed the Texas authorities on Monday of the dismissal, as of June 14, of 2,688 employees from its megafactory in Austin (Texas), according to a notification sent to AFP on Tuesday.
Source: BFM TV
