Tesla looks to ease doubts as earnings show 9% revenue drop for Musk-led company
Doubts persist for Tesla as demand for electric vehicles slows, and as some critics contend that Elon Musk seems to be devoting more energy to other projects.
Tesla’s stock jumped about 8% in after-hours trading Tuesday after the electric vehicle giant reported its steepest annual revenue drop in over a decade.
Despite softer sales and a growing chorus of skeptics about CEO Elon Musk’s focus on the company, investors cheered its vow to "accelerate the launch of new models," likely including more affordable ones like the long-awaited low-cost Model 2.
"They need to adjust to a new environment," Dan Ives, managing director at Wedbush Securities financial group, said on the heels of the company’s earnings report. Potentially speeding up the Model 2's rollout "shows they're listening," he said.
Tesla's first-quarter revenues slid 9%, its steepest year-over-year decline since 2012. While the financial results were short of Wall Street's expectations, investors are breathing a sigh of relief that the company appears to be prioritizing new vehicles.
Tesla has been facing more uncertainty on Wall Street than at any point since its near-bankruptcy several years ago. Its share price has plunged by nearly two-thirds — from about $407 at its November 2021 peak to about $145 as of Tuesday's market close. The stock has held the title of the S&P 500's worst performer this year.
Rating: 5