Tesla (TSLA) shares still managed to rise by almost 10% in after-hours trading on April 23 after releasing its first-quarter earnings results, according to The Guardian. It is indeed remarkable, considering the reported revenue miss and steep profit decline in Q1 2024.
Q1 2024 financial results highlights
Wall Street expected Tesla to report revenue of $22.220 billion and earnings of $0.49 per share in the first quarter of the year.
However, the Musk-led company missed the analysts’ forecasts with an actual revenue of $21.3 billion and earnings of $0.45 profit per share (Non-GAAP accounting).
Tesla’s $21.3 billion revenue in the first quarter indicates a 9% year-on-year drop, marking its most significant decline since 2012. Its profit also recorded a 55% YoY decline to $1.1 billion.
Tesla outlined some factors that caused the revenue drop in Q1 2024:
- Lowered EV average selling prices
- Delivery drop, partially due to the Tesla Model 3 update in the Fremont factory and Giga Berlin production disruptions (arson attack)
- Disrupted deliveries due to the conflict in the Red Sea
Tesla alleviates investors’ concerns, boosting shares
Despite the revenue decline, Tesla did report some good news to its investors. The company enjoyed accelerated growth in its R&D and capital investments.
“While many are pulling back on their investments, we are investing in future growth—including our AI infrastructure, production capacity, our Supercharger and service networks and new products infrastructure—with $2.8B of capital expenditures in Q1.”
Tesla
In terms of cash, Tesla proudly disclosed that it has “sufficient liquidity to fund [its] product roadmap, long-term capacity expansion plans and other expenses.”
The American EV giant also aims to grow its software-based products and expand its AI offerings and “fleet-based profits.” Tesla also recently disclosed plans to launch a Robotaxi service, hinting at a Waymo-like operation.
In addition, Tesla has also made significant changes to its plans for the next-generation cheaper electric vehicles. It will enable the company to accelerate the launch of the upcoming models earlier than originally expected.
“We have updated our future vehicle lineup to accelerate the launch of new models ahead of our previously communicated start of production in the second half of 2025. These new vehicles, including more affordable models, will utilize aspects of the next-generation platform as well as aspects of our current platforms, and will be able to be produced on the same manufacturing lines as our current vehicle lineup.”
Tesla
Investors’ apprehensions about the CEO
Tesla Chief Elon Musk continues to receive criticism from TSLA investors about his leadership capability after he purchased social media platform X (former Twitter). Nonetheless, the board still asked shareholders to back Musk’s $56 billion pay package after a judge rejected it in January.
The Tesla boss commented on these concerns during the Q1 2024 Earnings Call, saying that the company “constitutes the majority of my work time. I work every day of the week. I’m going to make sure Tesla is very prosperous.”
All that said, it would be interesting to see how Tesla can deliver on its promised cheaper electric vehicles with its updated strategy. These new models are expected to enable Tesla’s business growth amid the intensifying competition in the electric vehicle market.
You can watch Tesla’s Q1 2024 Earnings Call below:
