Tesla is enduring a tense moment. The electric vehicle company announced Tuesday that its profits had fallen 55% compared to the previous year. Elon Musk's company reported revenue of $21.3 billion, with net income down from $2.51 billion last year to $1.13 billion this year.
The company's total revenue fell far below initial projections of $22.15 billion, which, even so, was a reduction compared to 2023, when the company brought in $25.17 billion. In the days leading up to these figures being presented to shareholders, the electric vehicle company took a series of measures to cut its financial losses.
The first major move was to announce the reduction of its workforce. The company will lay off more than 10% of its employees globally. After this, the National Highway Traffic Safety Administration warned that nearly 4,000 Cybertruck models had to be recalled to change a series of defective pedals. Immediately after, in a new attempt to salvage customers, Tesla announced that it was lowering the price of the Model Y, Model S and Model X. All of these models will now cost $2,000 less than a few weeks ago.
More affordable models, Tesla's strategy to recover on the stock market
However, not all is lost. In the earnings report, Elon Musk assured that production of the new affordable Tesla models would soon begin. This new line will begin production "early 2025, if not late this year."
In addition, CNBC reported, the Musk also reported that Tesla would invest in artificial intelligence infrastructure. Along with this, he assured that the company had begun negotiating with "one major automaker" to obtain the license of its driver assistance system, which is marketed in the country as Full Self-Driving (FSD).
These announcements boosted shareholder confidence, and following its earnings announcement, the company saw an increase in the value of its shares by 13.33%, according to NASDAQ.
