Tesla profits fell 55% to $1.13 billion in the first quarter from the same year-ago period as a protracted EV price-cutting strategy and “severa

Tesla profits drop 55%, company says EV sales ‘under pressure’ from hybrids

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2024-04-24 09:30:09

Tesla profits fell 55% to $1.13 billion in the first quarter from the same year-ago period as a protracted EV price-cutting strategy and “several unforeseen challenges” cut into the automaker’s bottom line.

Tesla reported revenue of $21.3 billion in the first quarter, a 9% drop from the first quarter of 2023. Analysts polled by Yahoo Finance expected earnings of $0.51 per share on $22.15 billion in revenue. Tesla reported operating income of $1.2 billion in the first quarter, a 54% decrease from the same year-ago period.

The company said in its Q1 earnings report that it experienced “numerous challenges” in the first quarter, including the Red Sea conflict and the arson attack at Gigafactory Berlin and the gradual ramp of the updated Model 3 at its factory in Fremont, California. Tesla also noted that global EV sales continue to be under pressure as many carmakers prioritize hybrids over EVs. On the upside, that hybrid approach has meant automakers continue to buy regulatory credits; Tesla earned $442 million in zero emissions tax credits in the first quarter.

“The EV adoption rate globally is under pressure and a lot of other auto manufacturers are pulling back on EVs and pursuing plug in hybrids instead,” Tesla CEO Elon Musk said in opening remarks on the earnings call. “We believe this is not the right strategy, and electric vehicles will ultimately dominate the market.”