Investors gave Tesla’s stock a big boost Tuesday evening, despite the electric carmaker reporting its steepest annual revenue decline in over a decade. The 8% after-hours surge came as CEO Elon Musk vowed to “accelerate the launch of new models” to reinvigorate sales.
While Tesla’s Q1 revenues slid 9% year-over-year and missed Wall Street’s targets, the company provided hope in the form of fresh vehicle offerings on the horizon. Analysts believe this could include finally rolling out the long-awaited affordable Model 2.
“They’re listening,” said Dan Ives of Wedbush Securities, interpreting the new model tease as Tesla adjusting strategy “to a new environment” of softening EV demand.
Indeed, after years of breakneck growth, the electric vehicle market has cooled considerably in 2023. According to InsideEVs, major competitors only saw combined sales rise 18% over the past year as consumer interest wanes. Even Tesla’s deliveries dipped 9% from a year ago to 386,810 vehicles.
The slowdown has also hammered the company’s once-soaring stock price, which has plummeted nearly two-thirds from its 2021 peak amid growing competition and concerns over CEO Musk’s divided attention with X. The company has rapidly cut prices and headcount to realign expenses.
But despite the recent turbulence, some experts insist the company’s long-term trajectory remains promising if it can successfully diversify its product lineup beyond premium offerings.
“In the grand scheme of things, Tesla is not in any danger,” said Fred Lambert of EV website Electrek, noting its massive installed base primes it to capitalize on autonomous driving advances.
The earnings stumble also did little to shake faith in Musk’s ambitious vision for Tesla as an “AI/robotics” leader facilitating a self-driving transportation revolution.
