Tesla profits fall 55% as EV sales come under pressure

New York: Tesla reported a sharp drop in quarterly profit on Tuesday, reflecting upward pressure on the electric car market that has led to significant cost cuts.

Elon Musk’s EV company reported a profit of $1.1 billion, down 55 percent from the year-ago quarter on revenue of $21.3 billion, down nine percent.

After enjoying strong growth through 2022 and 2023, the electric car maker has faced a tough market in recent months as more competitors have introduced rival EVs, prompting Musk to slash prices over the last year or so.

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The company, which recently announced plans to lay off more than 10 percent of its workforce, has also recalled its Cybertruck due to an acceleration problem.

Tesla is committed to “company-wide cost reductions” as part of efforts to achieve “profitable growth,” it said.

Despite the belt-tightening shown in the statements, Tesla’s report provided some news that could please investors, saying it planned to “accelerate the launch of new models before the start of our production in the second half of 2025.”

The new cars will include “more affordable models,” Tesla said.

The statement comes in the wake of rumors that Tesla is shelving plans for the “Model 2,” the unofficial name for the expected mass-market, low-cost car.

Tesla shares rose 6.0 percent in after-hours trading.