Tesla Profits Decline By More Than 50% In Q1 2024
Tesla continues to decline after a spate of troubles under Elon Musk’s leadership. This time, its profits slumped by over 50% in Q1 2024.
Tesla reported its profits fell sharply in the first three months of the year to US$1.13 billion (£910 million), compared with US$2.51 billion in 2023. This came after the EV titan has also cut 10% of its workforce from as it grapples with falling sales and an intensifying price war for electric vehicles (EVs) from China contenders, plus reputational damage from crashes.
Despite its wounded reputation, Elon Musk strongly believes self-driving technology will become a major source of revenue for the world’s most valuable automaker. He has for years failed to achieve the goal of self-driving capability, with the technology under growing regulatory and legal scrutiny.
The earlier settlement of a lawsuit involving a tragic crash in 2018 was related to Tesla’s driver assistant technology. Earlier this month, Musk said Tesla will unveil its robotaxis on 8 August 2024, after Reuters reported Tesla had scrapped its inexpensive, mass-market car in favour of robotaxis. Tesla subsequently cut the U.S. monthly subscription price for the feature from US$199 to US$99.
BBC quoted revenue for Q1 2024 reached US$21.3 billion, down on analysts’ predictions of just over US$22 billion. However, Tesla’s plan to bring forward the launch of new models from the second half of 2025 boosted its shares by nearly 12.5% in after-hours trading. No pricing details were disclosed.
Musk’s reputation is also under scrutiny with investors labelling him “delusional”. Notoriously prideful, he touts Tesla’s AI credentials and plans for self-driving vehicles – even going as far as to say considering it to be just a car company was the “wrong framework.”
“If somebody doesn’t believe Tesla is going to solve autonomy I think they should not be an investor,” he said.
It is clear Tesla is failing upwards under his leadership, and Musk’s compensation remains questionable. Shareholders’ alleged request for a package worth US$56 billion was dismissed by a judge, who found Tesla’s directors breached their fiduciary duty to the firm by awarding Musk’s pay-out.
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