Tesla Profits Falls By half As Demand Declines

Tesla, owned and run by Elon Musk, says it will cut more than 6,000 jobs at its sites in Texas and California.

Tesla Profits Falls By half As Demand Declines

This year, Tesla's earnings have more than halved. In an attempt to turn around, the company has announced thousands of job cutbacks and now asserts it will unveil new models earlier than planned. 

The manufacturer of electric vehicles (EVs) reported on Tuesday that its earnings for the first three months of the year were $1.13 billion (£910 million), down from $2.51 billion in the same period last year.

Elon Musk, a millionaire, owns and operates Tesla, which announced plans to eliminate over 6,000 jobs at its locations in Texas and California. 

The company's stock price fell by 43% over 2024 as a result of declining demand and competition from lower-priced Chinese imports. 

It said earlier this month that it would lay off 10% of its workers worldwide.

Revenues for the first quarter of 2024 came in at $21.3 billion, below experts' projections of just over $22 billion. 

However, Tesla's decision to delay the release of new models until the second half of 2025 increased the value of its shares by around 12.5% during after-hours trading. 

The manufacturer of EVs withheld information on the new cars' prices. 

In a conference call with investors, Musk may discuss the specifics of the upcoming models, which may include the Model 2 (a less expensive Tesla car that Reuters said had been scrapped in April). 

But in the face of declining revenues, the corporation has already launched a charm offensive, attempting to win over new clients by lowering its pricing in a number of locations.

"Global EV sales continue to be under pressure as many carmakers prioritize hybrids over EVs," stated the report. 

In addition, Chinese models have overtaken Tesla in the market and are more affordable while maintaining dependability. 

Because of this, since the beginning of the year, the share price has decreased by around 40%. 

However, Tesla's stock price has had such problems in the past, plunging as low as $113 in January 2023 before more than doubling. 

However, Tesla's problems don't end there. Due to safety issues, the automaker was forced to recall hundreds of its new Cybertrucks.

This article was originally published on the BBC.