Following CEO Elon Musk's announcement that the electric car business intends to start producing new, reasonably priced EV models by early 2025, Tesla shares finished up 12% on Wednesday. (Photo : by Omar Marques/Getty Images)
Tesla shares surged 12% following CEO Elon Musk's announcement of plans to produce new, affordable electric vehicle models by early 2025, made during Tuesday's earnings call.
Despite underwhelming first-quarter financial results, with a 9% year-over-year revenue decline, Tesla's stock rallied on the news. The company missed earnings and sales projections but showed promising signs for future growth.
The affordable EVs will integrate aspects of Tesla's next-generation platform with existing technology from the Model 3 and Model Y, potentially increasing manufacturing capacity to over 3 million vehicles annually. However, specifics on pricing and model details remain undisclosed.
Following CEO Elon Musk's announcement that the electric car business intends to start producing new, reasonably priced EV models by early 2025, Tesla shares finished up 12% on Wednesday.
Musk made his remarks on Tuesday's earnings call, following the release of the company's underwhelming first-quarter financial results. The revenue had a 9% year-over-year fall, which was the worst since 2012.
The new EV cars were originally supposed to go into production in the second half of 2025, according to the corporation. Tesla has not released any information on any upcoming, reasonably priced models. The corporation usually holds "unveiling" events to showcase design concepts years in advance of manufacturing.
Tesla missed LSEG's projection of 51 cents in earnings per share and $22.15 billion in sales, reporting 45 cents in adjusted earnings per share on $21.3 billion in revenue.
Revenue decreased from $25.17 billion in the previous quarter to $23.3 billion in the previous year.
Bank of America analysts upgraded Tesla from neutral to buy while keeping their $220 price target on Wednesday, citing the company's first-quarter performance and leadership's remarks that "addressed key concerns" and "revitalized the growth narrative."
Tuesday saw UBS analysts maintain their neutral rating on Tesla shares and cut their price target from $160 to $147, indicating that they are still dubious of the company's claims.
As fior Elon's promise of affordable EVs, the cars will combine "aspects" of the company's next-generation platform with the one that powers its best-selling Model 3 and Model Y. Musk said that it could increase the company's manufacturing to over 3 million vehicles annually. "This is not contingent on a new factory or massive new production lines, it'll be made on our current production lines much more efficiently," he claimed.
Tesla has reiterated its pledge to produce more affordable electric vehicles (EVs), but it has not stated if it would introduce any new, low-cost versions. The Model 3 and Model Y cars, which by themselves account for the majority of the company's sales, could just be pared down versions of the more expensive models.
A Model 3 is currently available for $38,990, which is practically the lowest price the car has ever been. However, it is still not available for the illusive $35,000 that was promised over ten years ago. The business has guaranteed that further cost reductions would result from a streamlined "unboxed" production process.
