Tesla shares surged nearly 10% in after-hours trading on Tuesday after posting earnings results, despite a revenue miss for the first quarter of 2024 and recently announcing a recall of its Cybertruck.
The electric vehicle manufacturer posted $21.3bn in revenue, lower than the $21.48bn estimated and a 9% drop year over year – marking its biggest decline since 2012. As part of the report, the company released previews of a ride-hailing app to be integrated into its products and said it expects to release new vehicle models sooner than expected, bolstering investor confidence.
Tuesday’s report was the second since the launch of the Cybertruck, Tesla’s long-awaited electric pickup truck and its first earnings call since that vehicle was recalled last week. The futuristic steel car has struggled with a laundry list of other malfunctions. Tesla voluntarily issued a recall following reports of the vehicles were at risk of getting stuck driving at full speed due to a loose accelerator pedal. The company did not comment on the recall directly in its earnings release.
Even without the Cybertruck concerns, Tesla had already been facing a difficult year, saying last week that it was cutting 10% of its staff globally, about 14,000 jobs. Over the weekend, it slashed its prices around the world. It has weathered a series of poor earnings reports in recent quarters as competing Chinese electric vehicle manufacturers encroach on the electric vehicle market. Last quarter, Tesla reported that vehicle deliveries had fallen for the first time in four years. In today’s report, Tesla said its vehicle volume growth rate “may be notably lower than growth rate achieved in 2023”.
Musk continues to contend with ongoing criticisms from investors who say he is stretched too thin after his purchase of the social network Twitter, which he renamed X, in late 2022. The company and its products have been plunged into chaos in the ensuing year and a half. Meanwhile, Tesla has asked its shareholders to vote in favor of Musk’s $56bn pay package that was rejected by a judge earlier this year who called it an “unfathomable sum”.
More details soon …