Tesla hits the wall with older models and falling sales

• Published date: 25 April 2024
• Publication title: Bay of Plenty Times

Shares of Tesla rose 5.2 per cent in trading after yesterday’s closing bell, after the car maker said it would introduce new “more affordable models” before the second half of next year

But the stock is still down more than 40 per cent this year. The S&P 500 index is up about 5 per cent.

No further details were offered on the “more affordable” models. In January, there was speculation that chief executive Elon Musk had scrapped plans for a US$25,000 ($43,400) Tesla, slated for late 2025. Yesterday’s announcement implies the low-cost model is still in Tesla’s plans, and still on track.

The Austin, Texas, company said it made US$1.13 billion from January to March compared with US$2.51 billion in the same period a year ago.

Revenue was down 9 per cent from last year as worldwide sales dropped due to increased competition and slowing demand for electric vehicles.

Tesla said in a letter to investors that its vehicle sales growth “may be notably lower” than last year as it works on the launch of its next generation vehicle and unidentified other products.

The next generation vehicle apparently is the small Model 2, which is expected to give Tesla more appeal to mass-market buyers. It wasn’t clear whether the company would continue to pursue that car.

The company also appears to be counting on a vehicle built to be a fully autonomous robotaxi as the catalyst for future earnings growth. CEO Elon Musk has said the robotaxi will be unveiled on Aug. 8.

Shares of Tesla rose 5.2 per cent in trading after Tuesday’s closing bell, but they are down more than 40 per cent this year. The S&P 500 index is up about 5 per cent.

Musk has been touting the robotaxi as a growth catalyst for Tesla since the hardware for it went on sale late in 2015.

In 2019, Musk promised a fleet of autonomous robotaxis by 2020 that would bring income to Tesla owners and make their car values appreciate. Instead, they’ve declined with price...