Tesla's Q1 Earnings Fall, New Tech Boosts Stock

Tesla reported Q1 non-GAAP earnings of $0.45 per diluted share, a decrease from $0.85 a year earlier, and revenue for the quarter was $21.3 billion. Despite lower than expected results, the company's plan to introduce new products and technology led to a surge in premarket activity. Tesla has reiterated its capital expenditure target of $10 billion for this year, with expectations for it to exceed $10 billion. The company expects capital expenditure to be between $8 billion to $10 billion in each of the following years.

Tesla's Q1 earnings call triggered a 13% surge in after-hours trading. Future Fund’s Gary Black praised Elon Musk's performance on the call, highlighting the confirmation of the next-gen vehicle production and higher-than-expected gross margin. However, Deepwater Asset Management's Gene Munster remains cautious about 2024 Cybertruck production and skeptical of Musk’s prediction of 'a lot better' second-quarter sales.

Tesla's Q1 performance was sharply criticized by Gordon Johnson of GLJ Research, who called it an 'utter disaster' and a 'catastrophe'. He highlighted a record cash burn in the first quarter and a drop in operating margin. Johnson also said Tesla’s revised 2024 growth target is 'notably lower' than the previously announced 50% growth projection.

During Tesla’s Q1 earnings call, Musk emphasized the need to reorganize the company for the next phase of growth. He stated that there is 'no choice' but to reorganize, indicating a major shift in strategy for Tesla. Tesla also announced the acceleration of the development of its lower-priced electric vehicle, which could be available near the start of 2025.

Tesla has introduced a new Performance edition of the Model 3 in the U.S., priced at $52,990. This model is eligible for a $7,500 federal EV tax credit, bringing the effective price down to $45,490 for eligible buyers. The Performance version has a range of 296 miles and a top speed of 163 mph.

Tesla's Optimus robot is progressing in its ability to perform factory tasks, potentially increasing automation and reducing manufacturing costs. The company's strides in robotaxi and Full Self-Driving (FSD) benefit from a favorable regulatory climate, with more states approving autonomous driving. The Cybertruck's production ramp-up to 1,000 units per week indicates growing manufacturing capabilities.

A Tesla shareholder has filed a lawsuit in Delaware court to prevent Tesla and CEO Elon Musk from litigating Musk's 2018 pay outside of the state of Delaware. In April 2024, Tesla initiated certain restructuring actions in order to reduce costs and improve efficiency. As a result, they expect to recognize in excess of $350 million of costs primarily related to employee termination expenses in the second quarter of 2024.

Tesla shares surged by 10.7% after the company promised to launch 'more affordable' cars. The stock hit its highest point in 10 days. Tesla announced plans to introduce 'new models' by early 2025, stepping back from more ambitious plans to produce an all-new model expected to cost $25,000. CEO Elon Musk did not provide specific details about the new vehicles. The market reacted positively to these newly-minted plans, despite lower-than-expected profit and a drop in quarterly revenue.