First-quarter results are likely to trigger concerns that competitors will continue to grab a larger share of the declining electric car market.
Tesla reported on Tuesday that they made far less money in the first three months of this year due to sluggish car sales, deepening worries among investors that Elon Musk-led company is losing ground in the electric car market.
Profit fell 55 percent, to $1.1 billion, from the first quarter of 2023, the company said. And revenue fell 9 percent, to $21.3 billion.
The revenue decline was seen as inevitable after Tesla said earlier this month that first-quarter sales fell 8.5 percent from a year earlier, and after the company announced plans to lay off more than 10 percent of its workforce worldwide, or about 14,000 people.
The job cuts, including more than 2,000 workers at the company’s factory in Fremont, California, and nearly 2,700 at a factory in Austin, Texas, were seen as a sign that Tesla was struggling to align costs with declining revenue.
In the first quarter of 2023, Tesla made $2.5 billion and had one of the best profit margins in the industry, the company said a year ago. However, the company has been forced to lower prices, including in a new round last week, reducing the amount they make from each car they sell. Temporarily, the strategy seemed to help boost company sales, but Tesla now appears to be struggling to attract buyers even at lower prices.
Tesla’s operating profit margin in the last quarter was 5.5 percent, half of the previous year and in line with how much other automakers tend to make.
Tesla investors are increasingly concerned that declining sales and profits are symptoms of larger problems, possibly indicating the company’s inability to respond to increased competition from established automakers and new car manufacturers from China.
Mr. Musk recently indicated that Tesla would focus on autonomous driving technology and vehicles he calls Robotaxis, raising doubts about the company’s plans to develop new models at lower prices that could make electric cars affordable for a broader range of customers and people in more countries.
Autonomous cars have long been an obsession for Mr. Musk. In 2019, he said Tesla would have one million autonomous taxis on the road the following year; the company still does not have such taxis.
