Tesla Q1 report show sharp revenue and profit drops, but Musk promises affordable model for 2025

It's a turbulent time for Tesla, the EV giant once hailed as a disruptor, now struggling to maintain its dominance. The company hit a speed bump in the first quarter of 2024, when revenues saw a 9% drop - its worst performance since 2012. But there's a flicker of hope: CEO Elon Musk's hinted at a new affordable EV model in the pipeline.

Net income also took a nosedive, dropping by a massive 55% to $1.13 billion. These figures point toward a difficult period for the company, with its aggressive price cuts squeezing profit margins and mounting competition challenging its once dominant position.

Traditional automakers are now in the game, and rivals, especially in the lucrative Chinese market, are snapping at Tesla's heels. The slower than expected EV sales growth isn't helping matters either.

To counteract this, Tesla has been aggressively slashing prices in a bid to maintain demand. It's a risky gambit as evidenced by the dropping profits. Tesla's gross profits plunged by a worrying 18% in the first quarter, and that's largely attributed to these price adjustments.

After the setbacks of the report the silver lining was delivered by the CEO Elon Musk in the following earnings call. He teased that the company could start production of a new, budget-friendly EV as early as late 2024. Rumors had previously swirled about a possible $25,000 model and then its untimely demise, but Musk denied those. It seems that a more affordable option is indeed on the horizon, which boosted Tesla's stock prices.

The big question is: can this new model re-energize Tesla's fortunes? Tesla is also ramping up production at existing facilities, aiming for at least 50% growth over 2023. However, concerns linger about whether this is achievable in the current cutthroat EV market.

Tesla's self-driving technology continues to be the other contentious topic. The company's much-hyped "Full Self-Driving" (FSD) system remains in the spotlight for both its capabilities and the ongoing debate about its misleading name. And then there are leadership changes. This month's major restructuring, including the departure of key figures and Musk's multiple CEO roles across various companies, raises eyebrows in the industry.

The 2024 looks to be an interesting year for Tesla. It'll be fascinating to see whether this once-unstoppable force in the automotive world can regain its footing or if it falls back into the chasing pack.

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