Tesla shares jumped almost 12 percent in pre-market trading on Wednesday after CEO Elon Musk announced that the company aims to start production of affordable electric vehicle models by early 2025, or possibly even late this year. The bounce comes despite dismal earnings, including net income that dropped 55 percent in the first quarter.
CNBC reports that despite a dismal first quarter that saw Tesla’s revenue drop by nine percent year-over-year to $21.30 billion, missing analysts’ expectations, the electric vehicle maker’s stock experienced a significant boost following the earnings call. The decline in revenue, the steepest since 2012, was attributed to ongoing price cuts and increased competition in the global EV market.
During the earnings call, Musk revealed that Tesla plans to accelerate the launch of new vehicles, including more affordable models that can be produced on the same manufacturing lines as the company’s current lineup. This news comes as a surprise, as Tesla had previously expected to begin production of new models in the second half of 2025.
The company’s automotive revenue declined 13 percent year-over-year to $17.38 billion in the first quarter, while net income dropped 55 percent to $1.13 billion. Tesla’s gross profits also plummeted 18 percent, partly due to the price cuts implemented earlier this year to stimulate demand.
Despite the challenges, Musk remained optimistic about the future, stating that the company is in talks with “one major automaker” to license its driver assistance system, marketed as the Full Self-Driving (FSD) option in the U.S. He also emphasized Tesla’s investments in artificial intelligence infrastructure and expressed confidence that the second quarter would see significant improvements.
Tesla’s energy division saw a seven percent increase in revenue to $1.64 billion, while services and other revenue rose 25 percent to $2.29 billion compared to the same period last year. However, the company reported a negative free cash flow of $2.53 billion, attributed to a $2.7 billion buildup in inventory and $1 billion in capital expenditures on AI infrastructure.
Read more at CNBC here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship.