Tesla stock rises as Musk vows increased focus on company
Tesla (TSLA) stock jumped 6% on Wednesday, following the company’s first-quarter earnings report released the day before, which fell short of analyst expectations, News.Az reports, citing foreign media.
Investor sentiment was lifted by Tesla’s announcement that it plans to launch new vehicles in the first half of 2025. On the earnings call, CEO Elon Musk assured shareholders he would be dedicating more time to Tesla and scaling back his involvement in other ventures.
"Starting early next month, in May, my time allocation to DOGE [Department of Government Efficiency] will drop significantly," Musk said. Musk said he'd continue to spend a day or two per week at DOGE, but said he will be "allocating far more of my time" to Tesla.
Tesla stock jumped 5% in after-hours trading after Musk's disclosure.
Tesla reported Q1 revenue of $19.34 billion vs. $21.43 billion (Bloomberg estimate), well below the $21.3 billion reported a year ago. Tesla posted adjusted earnings per share of $0.27 vs. $0.44 estimated.
Tesla said plans for new affordable vehicles are on track for start of production in the first half of 2025 and that it still expects Robotaxi volume production starting in 2026. Along with Robotaxi testing, these were two big investor concerns heading into earnings.
The company blamed trade uncertainty as a reason behind slumping sales.
"Uncertainty in the automotive and energy markets continues to increase as rapidly evolving trade policy adversely impacts the global supply chain and cost structure of Tesla and our peers," the company said in a statement. "This dynamic, along with changing political sentiment, could have a meaningful impact on demand for our products in the near-term."
Musk said on the call that he told Trump that "lower tariffs" were better for the country but ultimately the decision on tariffs is up to the president.
Because of this uncertainty, Tesla said it would revisit its 2025 guidance in its second quarter financial update and removed its long-term growth forecast.
Tesla said its first quarter gross margin hit 16.3%, better than the 16.1% expected, with automotive gross margin ex-regulatory credits coming in at 12.5%.
In the past, Tesla had promised to launch a lower-priced EV in the first half of 2025, along with other new vehicles that the company said would allow it to return to a 50% growth rate compared to 2023.
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