admin Tesla’s first quarter net income plunged by 55%, but its stock price poured in after hours trading Tuesday as it was predicted that it would move up production of new and more cost-effective vehicles.
It has been reported that Tesla, which is based in Austin, Texas has made around $1.13 billion since the month of January till March as compared to the $2.51 billion in the same time just a year back.
Investors and analysts were restlessly waiting for Tesla’s earnings release for indications that the company could reverse its stock slide and sales downfall. In a letter to Investors which was sent on Tuesday, said that Tesla plans to commence production of smaller and more cost effective models in the next part of the year which will be ahead of previous projections.
These new compact models are predicted to have Model 2 aimed at the mass market with an estimated price of $25,000 will make use of new generation vehicle platforms having the features from the existing models. Tesla has also revealed that these vehicles will be manufactured on the same production lines as their existing lineup, dispelling earlier rumours of a potential new factory in Mexico.
“This update may result in achieving less cost reduction than previously expected but enables us to prudently grow our vehicle volumes in a more capex efficient manner during uncertain times,” the letter said.
Tesla has repeated in the letter that it is among the two main growth waves, the first one commencing with sales of Models 3 and Y. The company also expects that the next wave will come from “advances in autonomy and introduction of new products, including those built on our next generation vehicle platform.”
The shares of Tesla went up by 8.3% in trading after Tuesday’s conclusion, but they have gone down by 40% this year. The S&P 500 index is up about 5%.
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