Tesla posted a jaw-dropping earnings loss yesterday, with first-quarter earnings down 71% from the first quarter of last year. The company reported just $409 million in quarterly earnings, down from $1.4 billion in the first three months of 2024.
The company, however, disputed earlier reports that a planned car has been delayed.
The Mysterious Cheaper Tesla
Tesla has long discussed bringing a model less expensive than its current offerings to market. However, the specifics of that plan have changed several times.
Last year, Tesla canceled development of a planned Model 2. However, the company has since said it is still planning a lower-cost product. Recent reports say it may be a new version of its best-selling Model Y SUV, but the company has not confirmed that plan.
Lars Moravy, Tesla’s vice president of vehicle engineering, told investors on the earnings call, “We’re still planning to release models this year.” He said that ongoing supply chain issues triggered by new auto industry tariffs could mean some delays.
Asked specifically whether the plan reflects a new version of the Model Y, Moravy said only, “models that come out in the next months will be built on our lines and will resemble, in form and shape, the cars we currently make. And the key is that they’ll be affordable, and you’ll be able to buy one.”
Tesla Hurting for New Products
Tesla has little to suggest sales growth is possible without a new model.
CEO Elon Musk’s political activities have generated controversy and sparked protests at the company’s facilities, which is undoubtedly playing a major role in revenue struggles.
But, apart from the political turmoil, Tesla suffers from an aging lineup and a dearth of new products with strong sales potential. The company’s sales peaked in February of 2023, long before Musk’s major political engagement.
Its most recent product launch, the Cybertruck, has fallen so dramatically short of sales expectations that the company has a large backlog of unsold trucks and reportedly won’t even accept its own product as a trade-in on a new purchase.
Its only acknowledged product plans are an oft-delayed revival of its first product, the Roadster, and a promised Robotaxi and larger Robovan meant to act as driverless rideshare vehicles. Other companies have struggled to make the robotaxi business profitable.