Tesla’s profits sink as the company struggles with cooling demand

Tesla reported its first quarter earnings during an incredibly shaky moment for the company, in which the company’s sales numbers and stock price have both fallen. Against this backdrop, Tesla reported $1.1 billion in net income on $21 billion in revenue, down 9 percent from $23.3 billion the same time last year.

The company’s profits, once the envy of the auto industry, are at their lowest in six years thanks to rampant price cutting and slowing demand. Earlier this week, the company approved its latest price cuts for the US, China, and Germany — all major markets for the EV maker.

Tesla CEO Elon Musk is expected to face pointed questions from investors on these numbers, as well as recent reports that the company has paused development of a new, low-cost “Model 2” electric vehicle that was expected to come in at $25,000. Musk reportedly delayed the project, preferring to go “balls to the wall” on Tesla’s forthcoming robotaxi, which is expected to debut in August. Investors had pinned their hopes on the Model 2 spurring the company’s next wave of growth.

Earlier this year, Tesla reported lackluster sales numbers, in a sign that cooling demand for EVs and rising competition was taking its toll on the company. Tesla said it delivered 386,810 vehicles in the first three months of the year, an 8.6 percent drop compared to the first quarter of 2023. The company had earlier predicted slowed 2024 growth as it prepared to begin new vehicle production in 2025.

Soon after, the company said it would layoff 10 percent of its global workforce, or about 14,000 people. Bloomberg reported that the layoffs could ultimately reach 20 percent of the company’s employees.