The first quarter results are catastrophic. A week after announcing the elimination of more than 10% of its employees worldwide, i.e. more than 14,000 people in China and the United States, its largest markets and 400 jobs in its mega-factory located near Berlin, Tesla reported a 55% collapse in net profit compared to the first three months of last year, to $1.13 billion. All the lights are red. Deliveries are lower than last year and above all lower than analysts’ forecasts, production falls by 8.5% year-on-year, turnover also in the same proportions (-9%), at 21, 30 billion dollars. For Elon Musk’s group, this is the first decline since the Covid pandemic.
Electric cars: where Tesla is going
While these results, lower than analysts’ expectations, risked causing the stock price to fall, Tesla shares climbed nearly 11% in post-closing stock trading. At issue: the announcement by Elon Musk, who announced that he was bringing forward the launch of new models initially planned for the second half of 2025, in particular mentioning a low-cost electric vehicle ” as fast as possiblee “.
Cheap car
For the moment, the price of these new vehicles and their release date remained secret during the presentation of the results, but analysts estimate that Tesla could find a second wind with this vehicle nicknamed Model 2, which would be sold around 25,000 dollars. Recently, the Reuters news agency announced that this project had been shelved.
The price ” is one of the most important obstacles. The sector needs more products under $30,000 » according to Stephanie Valdez Streaty, director of Industry Insight at Cox Automotive. Today, the average price of all Tesla models combined stands at $42,110 in the first quarter, compared to $46,000 a year earlier. A figure prior to the drops announced over the weekend in Europe, the United States and China, but also in France.
Electric cars: Tesla lowers its prices in France
To meet this new schedule, the manufacturer will use part of the platforms of its current production lines. This could result in a lower cost reduction than previously expected but will allow better control of investment expenditure. in these uncertain times “, has indicated You’re here.
Tesla’s recent upheavals have caused its stock to fall by almost 30% in six months, the worst performance of all stocks in the S&P 500, the stock index based on 500 large companies listed on stock exchanges in the United States. The manufacturer, however, remains well above its competitors in terms of valuation, at $542 billion, compared to 305 billion euros for Toyota, the second highest-rated automobile group.
Fewer deliveries
The American group had warned, during the presentation of its 2023 annual results, that the year 2024 would have “ a growth rate in vehicle volume (which) could be significantly lower than the growth rate achieved in 2023 “. The fault of a situation between two waves of growth “, Tesla justified during questions with journalists: one driven by the release of Models 3 and Y in 2017 and 2020, respectively, and a second wave that would begin with the next generation vehicle platform. The latter will be marked by a “ total overhaul of the production system », Elon Musk rejoiced.
Tesla: drop in electric car prices boosts sales but shrinks margins
A prediction which was confirmed with the first international sales results published at the beginning of April. Deliveries are thus down 8.5% compared to the first quarter of 2023. Worse, it is even 20% less compared to the end of 2023, a first for Elon Musk’s company since 2020.
In the last quarter of 2023, the American company was even overtaken by its great Chinese rival, the manufacturer BYD, in the number of deliveries of electric vehicles.
Cascading price drops
To remedy this situation, Tesla is making price reduction announcements. The manufacturer must also lower its inventories according to JPMorgan analysts. First in the United States, then in China, where the group reduced the prices of its models by almost 2,000 dollars (around 1,870 euros) while it is faced with a decline in sales and an intensification of the war prices for electric vehicles (EVs), particularly compared to cheaper Chinese models. This week, it was Germany which benefited, then France: the price of the Model 3 fell by 3,000 euros, to 39,990 euros, according to data from the group’s website on Monday.
“ The prices of You’re here must change frequently in order to adapt production to demand “, the group’s CEO, Elon Musk, said on X on Sunday.
Another card to play by Elon Musk to keep investors hungry: autonomous cars. The manager announced a few weeks ago the release of completely autonomous robot taxis on August 8, which would make Tesla the first company to succeed in this bet.
