Tesla’s 1st Quarter Profits Fall: A-Level Business In The News

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What's the story?

Tesla has announced that its profits fell sharply in the first three months of the year to $1.13bn (£910m), compared with $2.51bn in 2023.

It caps a difficult period for the electric vehicle (EV) maker, which, faced with falling sales and competition from cheaper Chinese imports, has announced thousands of job cuts.

Boss Elon Musk remains bullish about its prospects, telling investors the launch of new models would be brought forward.

Its share price has risen but analysts say it continues to face significant challenges, including from lower-cost rivals.

The company has suffered from falling demand and competition from cheaper Chinese imports which has led its stock price to collapse by 43% over 2024.

Some investors have called for the company to instead focus on releasing a lower price, mass-market EV.

Figures for the first quarter of 2024 revealed revenues of $21.3bn, down on analysts' predictions of just over $22bn.

However Mr Musk made clear he also grander ambitions, touting Tesla's AI credentials and plans for self-driving vehicles - even going as far as to say considering it to be just a car company was the "wrong framework."

Such sentiments have been questioned by analysts though, with Deutsche Bank saying driverless cars face "technological, regulatory and operational challenges."

Despite plans to bring forward new models originally planned for next year the firm is cutting its workforce. Tesla said it would lose 3,332 jobs in California and 2,688 positions in Texas, starting mid-June.

Tesla’s 1st Quarter Profits Fall