NEW YORK: Elon Musk says he\u2019ll dedicate more time to Tesla starting in May after the company reported a big drop in first-quarter profit. The company has faced angry protests over Musk\u2019s leadership of a federal government jobs-cutting group that has divided the country.
\nTesla, based in Austin, Texas, said Tuesday that quarterly profits fell by 71 percent to to $409 million, or 12 cents a share. That\u2019s far below analyst estimates. Tesla\u2019s revenue fell 9 percent to $19.3 billion in the January through March period, below Wall Street\u2019s forecast.
\nThe disappointing results come as the company struggles to sell cars to consumers angry over Musk\u2019s role in the Trump administration. Musk also has publicly supported far-right politicians in Europe and alienated potential buyers there, too.
\nSome Tesla investors have complained that Musk has been too distracted by his role at the Department of Government Efficiency, or DOGE, to effectively run Tesla.
\n\u201cThis is a big step in the right direction,\u201d said Wedbush Securities\u2019 Dan Ives, referring to Musk\u2019s time commitment. \u201cInvestors wanted to see him recommit to Tesla.\u201d
\nTesla\u2019 stock has fallen more than 40 percent this year but rose more than 3 percent in after-hours trading.
\nMorningstar analyst Seth Goldstein said earlier reports of plunging sales that had tanked the stock made the results almost predictable.
\n\u201cThey\u2019re not particularly surprising given that deliveries were down,\u201d Goldstein said, adding that the company is still generating cash. \u201cIt was good to see positive cash flow.\u201d
\nThe company generated $2.2 billion in operating cash versus $242 million a year earlier.
\nTesla investors will be listening closely for updates on several strategic initiatives. The company is expected to roll out a cheaper version of its best-selling vehicle, the Model Y SUV later in the year. Tesla has also said it plans to start a paid driverless robotaxi service in Austin, Texas, in June.
\nIts closely watched gross margins, a measure of earnings for each dollar of revenue, fell to 16.3 percent from 17.4 percent.
\nThe company that once dominated EVs is also facing fierce competition for the first time.
\nEarlier this year, Chinese EV maker BYD announced it had developed an electric battery charging system that can fully power up a vehicle within minutes. And Tesla\u2019s European rivals have begun offering new models with advanced technology that is making them real alternatives, just as popular opinion in Europe has turned against Musk.
\nInvestors expect Tesla will be hurt less by the Trump administration\u2019s tariffs than most US car companies because it makes most of its US cars domestically. But Tesla won\u2019t be completely unscathed. It sources some materials for its vehicles from abroad that will now face import taxes.
\nTesla warned that tariffs will hit its energy storage business, too.
\n\u201cWhile the current tariff landscape will have a relatively larger impact on our Energy business compared to automotive,\u201d the company said, \u201cwe are taking actions to stabilize the business in the medium to long-term and focus on maintaining its health.\u201d
\nRetaliation from China will also hurt Tesla. The company was forced earlier this month to stop taking orders from mainland customers for two models, its Model S and Model X. It makes the Model Y and Model 3 for the Chinese market at its factory in Shanghai.
\nThe company side business of selling \u201cregulatory credits\u201d to other automakers that fall short of emission standards boosted results for the quarter.
\nThe company generated $595 million from credit sales, up from $442 million a year ago.<\/p>\n","protected":false},"excerpt":{"rendered":"
NEW YORK: Elon Musk says he\u2019ll dedicate more time to Tesla starting in May after the company reported a big drop in first-quarter profit. The company has faced angry protests over Musk\u2019s leadership of a federal government jobs-cutting group that has divided the country. Tesla, based in Austin, Texas, said Tuesday that quarterly profits fell …<\/p>\n","protected":false},"author":4,"featured_media":80031,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-80016","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-world"],"_links":{"self":[{"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/posts\/80016","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/comments?post=80016"}],"version-history":[{"count":1,"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/posts\/80016\/revisions"}],"predecessor-version":[{"id":80033,"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/posts\/80016\/revisions\/80033"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/media\/80031"}],"wp:attachment":[{"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/media?parent=80016"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/categories?post=80016"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nabanews.pk\/en\/wp-json\/wp\/v2\/tags?post=80016"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}