Tesla profits cut in half as demand falls | BBC News

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 5 55% on this time

uh 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 Aon delill 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

than 40% this year the mod 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 world

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 and a larger profit

decline due to the challenges in the

quarter and not 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 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 Tes 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 since this

this 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 compet ition

gets

tougher well now 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 um 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 um you know

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 uh he bought X and the wrangling

and the the legal wranglings over X that

he was not focused on Tesla enough he

was busy with other

things well Elon confirmed on on the

earnings call that he spends the

majority of his time at Tesla and I

think we've seen 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 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 he's taking

more of a 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 AC