Tesla suffered a huge 55% drop in net profit in Q1 2024 and announces production of more fuel-efficient cars

Tesla presented its financial results for the first quarter of 2024, and they are quite stark: a drop in profit by 9%, and gross income by 18%. The worst in eleven years and more than what they experienced during the COVID pandemic. It also came in with less money than Wall Street had expected, with the company reporting $21.3 billion versus the $22.15 billion analysts had estimated.

Tesla’s net profit in the first quarter of 2024 They had a very strong drop of 55% year over year.$1.129 million versus the $2.513 million they received in the first quarter of 2023.

Tesla Automotive Division Revenue fell 13% year on year at $1.734 million. The company’s shares have fallen 40% through 2024 on concerns about slowing auto sales, increased competition in China and lower vehicle costs following price cuts last year.

Tesla claims that the decline in revenue and profit in the first quarter of 2024 is due to a number of circumstances beyond the company’s control. The Fremont plant that produces the Model 3 was shut down to adapt the production line to the new Model 3 Highland. Giga Shanghai also had less production than expected due to Chinese New Year. And at Giga Berlin, Model Y production was reduced due to the conflict in the Red Sea and attacks on facilities, which forced the assembly of new models to stop.

Tesla produced 433,371 vehicles in the first quarter of 2024 but delivered 386,810. This disparity was alarming because it represented a decline in interest in the brand and a clear sign that competition was now starting to impact the company’s sales.

Tesla will produce cheaper cars sooner than expected

Despite the results, Tesla shares rose after news of the company's artificial intelligence efforts and investments became public. It also turned out that they will speed up the production timeline for a more fuel-efficient car. although it won't be Model 2but a car that uses some of the innovations of the next-generation platform together with modern technologies to continue to use already assembled production lines.

This means that they will introduce new products at more attractive prices. until the second half of 2025. The announcement appears to be important for the peace of mind of investors, who know that Tesla's future is not just about fully autonomous driving, but also about producing more fuel-efficient cars to reach a much wider market.

Elon Musk announced that Tesla will unveil robotaxis on August 8, moments after Reuters published a message about the cancellation of the Model 2. News that the company's CEO categorically denied, but now it is clear that it is true. Days later Electrek He also confirmed that the $25,000 car project had been cancelled.