Tesla, the first drop in earnings since 2012 and profits less than 55%. “We will reduce every penny of your car costs”

Tesla is no longer racing: between January and March the car maker’s revenue fell by 9% to 21.3 billion dollars, recording the first quarterly drop since 2012. Profits more than halved, with a drop of 55% to more than 1.1 billion. Is it a temporary drop or a sudden stop? The market has been asking this for months and, for now, it seems to rely on the second answer: since the beginning of the year, the manufacturer founded by Elon Musk has lost 40% on Wall Street, falling to 450 billion in the market. capital.

Declining sales of electric vehicles

Of course, there is no shortage of reasons for the decline in the first quarter. Tesla had to halt production at its Berlin factory due to the fire and has increased investment in artificial intelligence and the development of new low-cost electric models. However, investors were particularly affected by the decrease in shipments and continued price cuts implemented in Europe and the United States. Two tips that highlight the threats coming to Tesla. On the one hand, the low growth in the registration of electric vehicles, which, with the exception of China, remains only above 4% of global vehicle sales. On the other hand, fierce Chinese competition that is taking market shares from Tesla in the domestic market and, increasingly, also abroad.

A cost-cutting plan and mass layoffs

To meet these challenges, Musk intends to follow a less creative path: putting the pedal to the metal in savings. It is no coincidence that one of the slides presenting the account has the right to “squeeze every cent from the cost of the car” and shows an assembly line with many components and only four people. Recently, moreover, Tesla announced the largest layoff program in its history, which will affect 10% of the world’s workforce, i.e. more than 14 thousand workers. A few days later, the company proposed to the shareholders’ meeting to restore the salary package of over $56 billion for CEO Musk, canceled by a Delaware court in January because it was excessive and against the interests of shareholders.

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