Starting in the US where Tesla revealed the biggest slump in earnings

in more than a decade

as the road gets increasingly rocky for the electric car industry.

Tesla made profits of $1.1 billion in the first three months of the year.

That's a fall of 55% on this time.

Last year revenues were 9% lower

and both numbers were worse than investors had been expecting.

But Tesla shares, well, they've taken a real pounding this year.

They actually jumped by nearly 12% in after hours trade

after the company promised quicker progress on new more affordable models.

Erin Delmore has been looking at the numbers.

It's been a rocky road for Tesla this year.

Higher interest rates are taking a bite out of consumer purchasing power

and pushing big purchases out of reach.

Competition with China, especially rival electric vehicle maker BYD, is heating up.

Sales have been falling and so is Tesla's stock.

It's down more than 40% this year.

The model Y.

The company's been cutting prices and announced layoffs.

And then on Tuesday, the company reported its first quarter earnings,

missing expectations on earnings and revenue.

And the company is anticipating lower deliveries this year,

compared to 2023.

But investors have one bright spot to look to,

Tesla announced it's speeding up the launch of a lower priced vehicle.

More affordable models could be a boon for cash strapped US consumers

and a hit in big competitive markets worldwide like China and India.

Erin Delmore there.

Well, I also spoke to Seth Goldstein, who's a strategist

at the investment manager Morning Star

where he chairs their committee on electric vehicles.

He gave us his reaction to the results from Tesla.

Well, we knew that deliveries were going to fall.

And so, we're likely going to see a revenue decline

and a larger profit decline due to the challenges in the quarter.

And not only just lower sales but the production issues as well,

as ramping up new vehicles like the cyber truck

that we're going to weigh on profits.

But looking at the quarter, you know, the bad news is already largely known.

So now, the question for investors was what was Tesla's strategy going forward.

Were they going to cancel the affordable vehicle as was rumored in the media?

Or were they going to continue it?

And Tesla said they're going to accelerate it.

Plus, full self-driving is on track to start generating more and more revenue.

So looking forward, I think the bad news was largely priced into the stock.

Tesla confirmed their strategy

and that's why we saw the stock rise in after hours,

despite results coming in below consensus.

Now, of course, what's going on with Tesla

reflects what's going on in the global economy

and things have changed radically

sincethis firm first came to our attention

and was a disruptor within the car industry.

Now, every big car maker in the world is getting its electric vehicles out there.

So, just talk us through the future for Tesla as the competition gets tougher.

Well, now Tesla is no longer the first mover.

They don't have that advantage of being the incumbit in the market.

Now they have to make the case to consumers of why you should buy a Tesla

versus another vehicle,

especially Tesla was one of the first long range electric vehicles,

versus early EVs had a much shorter range,

usually half the range of a Tesla or less.

And so, that was pretty easy for consumers

who wanted the longer range to choose a Tesla.

Now Tesla to rely on things like the full self-driving,

rely on the performance specs, the battery life,

offering consumers more infotainment while they charge,

those sorts of ancillary products and services

as a reason to buy Tesla over another EV brand

because the EV market,

especially in the luxury space where Tesla currently operates,

is largely saturated with new players and incumbents.

And so, Tesla no longer enjoys having that sort of market dominance

that they once had.

And just quickly Seth, are you concerned at all

about Elon Musk still being in charge of Tesla as the boss, as CEO?

There was a lot conversation some time ago when he bought X and the wrangling

and the legal wranglings over X

that he was not focused on Tesla enough.

He was busy with other things.

Well, Elon confirmed on the earnings call

that he spends the majority of his time at Tesla.

And I think we've seen a very strong management team from Tesla

that includes Tom Zoo, who's the effective COO,

who makes a lot of the pricing and manufacturing decisions.

And so, I think Elon is more than capable of continuing to be the CEO of Tesla

as well as meet his other business ventures.

And you know, with X, he's taking more of a technology role.

He's not the CEO of that company.

So, I think he'll be able to run Tesla

and Tesla will still be able to meet their goals.

Interesting, Seth Goldstein there from Morning Star.

Well, Tesla is the first of the so-called Magnific 7

- that's the tech companies that dominate US markets

to report quarterly earnings.

Today, we'll be hearing from Facebook and Instagram owner Meta.

Thursday, we have results from Google owner alphabet as well as Microsoft.

Over the past week or so,

around a trillion dollars has been wiped off the value of big tech companies.

But on Tuesday, US markets were higher

with the tech heavy NASDAQ index up 1.6%.

So maybe, some optimism is coming.