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Tesla touts acceleration of affordable EVs, but Q1 results fall short of estimates

Published 24/04/2024, 06:46 am
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Investing.com -- Tesla jumped in afterhours trade Tuesday as the electric vehicle maker's announcement that it was accelerating the launch of new EVs including affordable models overshadowed fiscal first-quarter results that fell short of estimates amid waning EV demand.

Tesla Inc (NASDAQ:TSLA) rose more than 6% in afterhours following the report.

For Q1, the company reported adjusted earnings per share of $0.45 on revenue of $21.03 billion, missing Wall Street estimates of $0.49 a share and $22.27B, respectively.

Tesla delivered 386,810 EVs during the quarter, down from 433,371 in the three-month period a year earlier.

The company's price cuts on its EVs to boost demand weighed on margins, as automative gross margin -- a crucial gauge of Tesla's core operations -- fell 11.6% in Q1 from 17.6% in Q4, missing estimates of about 15%.

The EV maker touted the launch of new EVs including affordable models amid some investor concerns about reports that Tesla could scrap plans for a cheaper EV.

"We have updated our future vehicle line-up to accelerate the launch of new models, with production set to start in the second half of 2025," the company said.

"These new vehicles, including more affordable models, will utilize aspects of the next generation platform as well as aspects of our current platforms, and will be able to be produced on the same manufacturing lines as our current vehicle line-up," it added.

Many on Wall Street believe that an affordable Tesla is key to mass adoption that will also the company to boost subscriptions of its higher margin self-driving software.

"Amid the current price war, particularly in China - and with the prospects of the company venturing into the Indian market - the word "affordable" resonated as music to the ears of shareholders," Investing.com analyst Thomas Monterio said on Tuesday.

"This means the company may just be able to use its gigantic production capacity more efficiently while maintaining the original proposal of its higher-end models," Monterio added.

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