Tesla (TSLA) Q1 2024 results

Tesla reported a 9% drop in first-quarter sales on Tuesday, its biggest decline since 2012, missing analysts’ estimates as the electrical vehicle maker weathers the impact of ongoing price cuts.

Here’s what the corporate reported in comparison with Wall Street’s expectations, based on an analyst survey by LSEG:

• Earnings per share: 45 cents adjusted versus 51 cents expected
• Revenue: $21.30 billion versus expected $22.15 billion

Revenue fell from $23.33 billion a 12 months ago and from $25.17 billion within the fourth quarter. Net income fell 55% to $1.13 billion, or 34 cents per share, compared with $2.51 billion, or 73 cents per share, a 12 months earlier.

The decline in sales was even steeper than the corporate’s last decline in 2020, which was as a consequence of production disruptions throughout the Covid-19 pandemic. Tesla’s automotive sales fell 13% year-over-year to $17.38 billion in the primary three months of 2024.

Tesla CEO Elon Musk said on the conference call that the corporate plans to start producing recent models “in early 2025, if not the end of this year,” after previously expecting to start production within the second half of the 12 months to be included in 2025.

In his Shareholder deckTesla reiterated a pessimistic outlook for 2024, telling investors that “the volume growth rate could be significantly lower than the growth rate achieved in 2023.”

Tesla shares have plunged greater than 40% this 12 months on worries about weak deliveries, competition in China and the corporate’s continued price cuts. Earlier this month, Tesla reported an 8.5% year-over-year decline in vehicle deliveries for the primary quarter.

The stock traded near its lowest level since early 2023 and rose about 8% in prolonged trading following the report.

The company said within the presentation that it’s accelerating the introduction of “new vehicles, including more affordable models” that could be manufactured “on the same production lines” as Tesla’s current lineup. Tesla goals to “fully utilize” its current production capability and achieve “more than 50% growth over 2023 production” before investing in recent production lines.

Sales at Tesla’s energy division rose 7% to $1.64 billion, while services and other revenue rose 25% to $2.29 billion in comparison with the identical period last 12 months.

Electric vehicle sales growth is slowing, and Tesla and major rivals have been cutting electric vehicle prices repeatedly for months to stimulate demand. Tesla’s gross profit fell 18% in the primary quarter, partly as a consequence of price cuts earlier within the 12 months.

Tesla said the entire sales included revenue from previous sales of its premium driver assistance system, marketed as a Full Self Driving (FSD) option. The release of a feature called Autopark in North America allowed the corporate to acknowledge deferred revenue.

Chris Redl, an auto analyst at Siena Capital, estimates that Tesla booked as much as $700 million in deferred revenue in FSD’s quarter. That’s about 4.3% of Tesla’s automotive sales after regulatory credits.

Tesla began a significant restructuring this month with the resignation of two executives, Drew Baglino and Rohan Patel. Musk said in a company-wide memo last week that the automaker would cut greater than 10% of its global workforce.

Capital spending increased 34% 12 months over 12 months to $2.77 billion.

Free money flow turned negative within the quarter, with the corporate reporting a deficit of $2.53 billion. A 12 months ago, Tesla reported free money flow of $441 million, a figure that reached $2.06 billion within the fourth quarter. Tesla attributed the negative number to a list construct of $2.7 billion and investments in “AI infrastructure” of $1 billion.

A live stream of the Results call is scheduled for five:30 p.m. ET.

Correction: An earlier version of this story contained an incorrect number for automobile sales.

REGARD: The proven fact that Musk was right about electric vehicles does not imply he shall be at once