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Tesla profits down 55 per cent amid job losses, delivery issues and Cybertruck recall

Tesla experienced a 55 per cent decline in profits this quarter compared to the same period last year, according to the EV company’s latest financial disclosures.

During that same period, revenues fell nine per cent, to $21.3bn, according to the filing on Tuesday. It’s the largest decline in revenue the company has reported since 2012, CNBC reports.

In a summary alongside the disclosure, the company described a host of challenges in recent months.

“We experienced numerous challenges in the [first quarter] from the Red Sea conflict and the arson attack at Gigafactory Berlin, to the gradual ramp of the updated Model 3 in Fremont,” the company wrote. “Global EV sales continue to be under pressure as many carmakers prioritize hybrids over EVs.”

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The figures are the latest sign of difficulties at the electric carmaker.

This month, the company, facing increased competition from other EV manufacturers, reported that sales in the first quarter of 2024 were down 8.5 per cent compared to the previous year.

That’s a steeper decline than during the last major slump in 2020, amid the worst of the Covid pandemic.

Deliveries, meanwhile, are also down 20 per cent compared to the previous quarter, according to Tesla.

If that wasn’t enough, the company announced last week it would recall all of the nearly 4,000 of the hotly-anticipated Cybertruck models it had recently delivered to customers, citing issues with the acceleration pedal.

Tesla CEO Elon Musk is pictured during a visit at the company’s electric car plant in Gruenheide near Berlin, eastern Germany, on 13 March 2024, as employees resumed work after production had to be halted due to a suspected arson attack that caused a power outage (AFP via Getty Images)
Tesla CEO Elon Musk is pictured during a visit at the company’s electric car plant in Gruenheide near Berlin, eastern Germany, on 13 March 2024, as employees resumed work after production had to be halted due to a suspected arson attack that caused a power outage (AFP via Getty Images)

“Tesla pushed electrification and created this momentum. But now their growth is definitely slowing down … and they haven’t had a fresh new product,” Stephanie Valdez Streaty, director of industry insights for Cox Automotive, told The Washington Post on Tuesday in response to the numbers.

To make matters worse, Tesla CEO Elon Musk told staff this month that an estimated 14,000 people, around 10 per cent of the company’s workforce, would face layoffs, with Mr Musk calling the cuts a tough but necessary step to make the company “lean, innovative and hungry for the next growth phase cycle”.

The company has said it hopes to turn things around with the launch of new models, including more affordable offerings. Mr Musk has also claimed that the company will unveil an autonomous robo-taxi this summer.

Mr Musk did not appear to react to the news with any comments on X, and Tesla did not respond to a request for comment from The Independent.

The earnings report is a far cry from just a few years ago, when in 2021 Tesla became the first automobile company to be valued at over $1 trillion.