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Tesla 1Q Revenue Falls, Margins Beat, Eyes Robotaxi

Tesla's Q1 revenue falls 9% to $21.3 billion, misses estimates amid vehicle delivery drop and strategic shifts for growth.

By Alex P. Chase

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4/23, 17:27 EDT
Tesla, Inc.
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Key Takeaway

  • Tesla's Q1 revenue fell 9% to $21.3 billion, missing estimates amid a 20% quarterly drop in vehicle deliveries.
  • Despite revenue and profit margin declines, Tesla shares rose 6% after-hours; plans include accelerating new model launches.
  • The company's strategic focus includes significant investments in AI, production capacity, and unveiling a Tesla robotaxi by August 8, 2024.

Revenue Decline and Profit Margin Erosion

Tesla reported a 9% decline in first-quarter revenue, with figures falling to $21.3 billion from $23.3 billion in the same period last year, missing the analysts' expectations of $22.3 billion. This downturn marks Tesla's first year-on-year quarterly drop since the start of 2020. Despite the revenue decline, Tesla shares experienced a 6% increase in after-hours trading. The company has navigated a challenging period, with its shares plunging more than 40% since the beginning of the year. This decline was attributed to warnings of slowing vehicle deliveries, a potential move of its incorporation to Texas from Delaware, and plans to cut more than 10% of its workforce, which amounts to at least 14,000 jobs.

Vehicle Deliveries and Price Cuts

Tesla's vehicle deliveries for the first quarter totaled 386,810 electric cars, a decrease of 20% from the previous quarter and 8% lower than the same period in 2023. To address the excess inventory, Tesla has implemented price cuts for its most popular models. Additionally, the company has announced its intention to "accelerate the launch of new models ahead of our previously communicated start of production in the second half of 2025," with a focus on introducing more "affordable" cars. This strategic move aims to rejuvenate sales and address the market demand for more cost-effective electric vehicles.

Financial Performance and Strategic Shifts

Tesla's first-quarter earnings for 2024 revealed a profit per share of $0.45, which did not meet the anticipated $0.49 by analysts. The company identified the reduced average selling prices of vehicles and a decline in vehicle deliveries as primary reasons for the revenue shortfall. Despite these financial challenges, Tesla remains committed to its future growth strategies. This includes significant investments in AI infrastructure, production capacity, and new product development, with capital expenditures amounting to $2.8 billion in Q1. A notable aspect of Tesla's strategic direction is its focus on self-driving technology, highlighted by CEO Elon Musk's announcement of a Tesla robotaxi unveiling scheduled for August 8, 2024.

Management Quotes

  • Tesla Management:

    "Still Sees ‘Notably Lower’ Volume Growth Rate for 2024." "Updated Our Future Vehicle Line-up." "To Accelerate Launch of New Models." "New Vehicles, Including More Affordable Models." "To Accelerate Launch of More Affordable Models." "Remain Committed to Company-Wide Cost Reduction." "Cost Reduction Incl Reducing Cogs Per Vehicle." "Production at Gigafactory Shanghai Down Sequentially due to Seasonality & Planned Shutdowns." "Product Update May Lead to Less Cost Cuts Than Expected." "Currently Working on Ride-Hailing Functionality, accelerating launch of new models ahead of our previously communicated start of production in the second half of 2025."