Tesla Inc. (NASDAQ:TSLA) experienced a significant surge of over 10% in stock value at the market open on Wednesday following the announcement of plans to accelerate the introduction of more affordable electric vehicles. This announcement countered earlier reports suggesting the company might abandon these plans in favor of focusing solely on its robotaxi product.
In its first quarter shareholder release issued late Tuesday, Tesla stated, “We have updated our future vehicle line-up to accelerate the launch of new models ahead of our previously communicated start of production in the second half of 2025.” During the company’s earnings call, CEO Elon Musk indicated that the timelines for these new vehicles could be as early as 2025, if not sooner. Although Tesla did not disclose the exact debut date for the cheaper electric vehicle, Musk mentioned that further details would be shared on August 8, coinciding with the unveiling of the robotaxi.
Tesla elaborated in the release that these new vehicles, including more affordable models, will utilize aspects of the next-generation platform and their current platforms. They will also be able to be produced on the same manufacturing lines as Tesla’s current vehicle lineup.
Despite reporting lower-than-expected revenue and earnings, investors reacted positively to the promising update on Tesla’s present and future endeavors. Tesla reported adjusted earnings per share of $0.45 for the first quarter, falling short of the estimated $0.52, with revenue totaling $21.30 billion, missing forecasts of $22.3 billion according to Bloomberg data.
This marked a 9% decline in revenue compared to the previous year, representing Tesla’s first revenue drop in four years. Operating profit in the first quarter stood at $1.2 billion, while adjusted net income reached $1.5 billion, both figures down over 50% from a year ago. Despite these challenges, Tesla reaffirmed its expectation of notably lower delivery volume, consistent with its previous Q4 earnings report.
In its shareholder letter, Tesla also provided preview images of a ride-hailing feature within its app, offering insights into the functionality of a Tesla robotaxi.
Leading up to Tesla’s Q1 report, its stock had experienced significant declines amid disappointing Q4 results, vague 2024 delivery guidance, missed Q1 delivery estimates, and uncertainty regarding the existence of a sub-$30,000 volume electric vehicle. The decline in revenue and profitability mirrored a weaker-than-anticipated quarter of sales for Tesla, with global deliveries totaling 386,810 in Q1, below estimated figures of 449,080, and vehicle production reaching 433,371, also falling short of expectations.
Despite concerns over global demand, Tesla assured investors of the forthcoming sub-$30,000 mainstream electric vehicle, dubbed the Model 2, which will leverage aspects of the next-gen platform alongside existing platforms to facilitate production on existing assembly lines. Conversely, as per Tesla’s announcement, the “purpose-built robotaxi” is slated to utilize a revolutionary “unboxed” production line for manufacturing.
Featured Image: Megapixl
Author Faith Yakubu 
