On April 23rd, after the market closed, Tesla announced its first-quarter earnings, with revenue down 9% year-over-year, marking the company's largest year-over-year decline since 2012. However, Musk indicated that the company plans to begin production of new models by 2025, which propelled Tesla's stock price to surge by over 12% in after-hours trading. This year to date, Tesla's stock price has cumulatively fallen by more than 40%.
Tesla is facing fierce competition in the global electric vehicle market, and recently the company has comprehensively reduced the prices of electric vehicles and autonomous driving software worldwide to stimulate demand.
In the first quarter of this year, Tesla's revenue was $21.3 billion, down 9% year-over-year, a decrease that even exceeded the sales decline caused by production disruptions during the pandemic; net profit plummeted by 55% from $2.5 billion a year ago to $1.1 billion; gross profit fell by 18%.
Multiple factors have led to Tesla's significant profit drop, with the main reason being Tesla's price reduction in the intense electric vehicle price war, especially as competition in the Chinese market, which supports Tesla's sales, intensifies, leading to a downward trend in Tesla's sales. In addition, the Red Sea crisis in the first quarter also affected Tesla's logistics and led to increased operating costs. Musk stated that the situation in the second quarter may improve.
Meanwhile, capital expenditure increased by 34% to $2.77 billion. Tesla attributed the increase in spending to $1 billion in "artificial intelligence infrastructure" capital expenditure. Tesla is actively purchasing AI chips to train its autonomous driving large models.
Earlier this month, Tesla announced that its vehicle deliveries in the first quarter decreased by 8.5% year-over-year. Tesla expects that the sales growth rate in 2024 may be significantly lower than the growth rate in 2023.
However, to boost confidence in Tesla in the capital market, Musk stated during the earnings call that the company plans to start producing new models "at the beginning of 2025, or even by the end of this year," including more affordable electric vehicles. Previous reports indicated that Tesla had abandoned the development of a low-cost model known as the Model 2, turning to the development of the autonomous driving taxi, Robotaxi.
During the earnings call, Tesla showcased a screen based on the Robotaxi ride service. Musk also stated that Tesla is negotiating with a major car manufacturer for the licensing of its assisted driving system.
To cut costs, Tesla initiated a large-scale global personnel adjustment this month, reducing its global workforce by more than 10%. According to First Financial Daily, Tesla's layoffs in China involve almost all departments, with some departments experiencing a layoff ratio far exceeding 10%.
Musk was asked during the earnings call whether he planned to leave Tesla, considering that he already owns multiple companies, which could divide his attention. He did not provide an answer but stated that he spends most of his time working, rarely takes a break even on Sunday afternoons, and will strive to ensure Tesla's continued growth.Recently disclosed data indicates that Tesla will cut 2,688 jobs in Austin, Texas, where its headquarters are located, and 3,332 jobs in California. Filings show that as of December 2023, Tesla's total employee count exceeds 140,000.