Tesla Stock Shock: EV Giant Misses Revenue Targets Amid Cooling Demand

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TL;DR:

• Tesla stock stumbles as its Q1 revenue fell to $21.3B, missing estimates as profits sunk to a 6-year low
• Tesla Cybertruck launch stumbles, 10%+ of workforce laid off amid cooling EV demand
• Plans for $25K “Tesla Model 2” shelved to focus on robotaxi, but stock rises on hope for affordable models
• Competition from Chinese rivals like BYD intensifies as Tesla’s margins shrink
• Energy storage business poised to outgrow auto business as Tesla navigates tough road ahead

In a pivotal earnings call that felt like a student begging for extra credit, Tesla revealed just how tough times have gotten for the once high-flying EV maker.

Whiffing on Revenue

For starters, Tesla blew its revenue targets, pulling in just $1.1 billion in net income on $21.3 billion in revenue in Q1 2024. That’s a 9% drop from what it raked in during the same period last year. So it’s safe to say Tesla gets a failing grade on this assignment.

Tesla Profits in Free Fall

But revenue wasn’t the only sore spot. Tesla’s profits sunk to depths not seen in six long years. The culprit? Rampant price slashing as the company desperately tries to stoke cooling demand for its electric vehicles.

Tesla delivered a mere 386,810 cars in Q1, a concerning 8.5% year-over-year decline. And with operating margins shrinking to a measly 5.5% (down from a much healthier 11.4% a year ago), it’s clear Tesla is feeling the squeeze.

Cybertruck Stumbles

As if that wasn’t enough, Tesla’s overhyped Cybertruck launch turned into a dumpster fire. Not only is demand for the ugly and unpractical vehicle limited to douchebags, but the company struggles just to manufacture them in limited quantities. Tesla only managed to get just 4,000 of the apocalypse-ready pickups to customers before a massive recall over accelerator pedal issues slammed the brakes on deliveries.

Pink Slips Pile Up for Tesla Employees

With storm clouds gathering, Tesla had no choice but to start handing out pink slips like Halloween candy to its employees. The company said goodbye to over 10% of its global workforce, or roughly 14,000 employees. Saying there’s “nothing I hate more,” CEO Elon Musk defended the deep job cuts as a necessary evil to streamline for the next phase of growth.

Ditching the $25K Dream

Part of that streamlining apparently involves punting on Tesla’s long-promised $25,000 “Model 2” EV. The affordable electric car, once seen as key to unlocking the next wave of growth, has reportedly been put on ice as Tesla goes all-in on an upcoming robotaxi instead.

Silver Linings for Tesla Stock

It’s not all doom and gloom, though. Despite the earnings miss, Tesla’s stock price somehow defied gravity and floated higher in after-hours trading. The company’s vow to fast-track the launch of wallet-friendlier models seems to have given investors a flicker of hope.

Tesla also teased plans to weave ride-hailing tech into its app to take on the likes of Uber. And its energy storage business, the company says, is poised to outgrow its auto business this year. So there’s that.

The Road Ahead For Tesla

Still, there’s no sugarcoating it: Tesla is navigating some seriously treacherous terrain. With EV demand cooling, competition heating up, and its once-fat margins withering away, the company faces an uphill climb.

Chinese rivals like BYD are nipping at Tesla’s heels. And unless Musk and company can crank out some compelling (and affordable) new models soon, the EV pioneer risks ceding even more ground.

The undergrad vibes of this Tesla stock earnings call made one thing crystal clear: Tesla’s in for a bumpy ride. Extra credit alone won’t cut it for Musk anymore. To get back on track, Musk needs to focus on making cars, not memes for Twitter (currently called X). Hopefully he gets back on his ADHD meds sooner than later.

Tesla's Q1 earnings miss the mark as profits plunge to 6-year lows. But don't count out the EV trailblazer just yet. New affordable models and #robotaxi plans could get Tesla back on track. $TSLA #Tesla #EVs #ElonMusk #Earnings Share on X