Tesla Set for Worst Quarterly Results in 7 Years

Tesla is expected to report for the first quarter of 2024 its lowest quarterly profit margins since early 2017 amid a price war in the electric vehicle sector and a slowdown in demand, analysts say.

Elon Musk’s EV manufacturer is set to release its financial results for the first quarter on April 23 and gross margins are expected at their lowest in years, the Financial Times reports.

Dan Levy, an analyst at Barclays, expects Tesla to have also booked “modestly negative” free cash flow, FT notes. This would be the first negative FCF for the EV maker since early 2020.

Tesla already reported early this month a plunge in deliveries for the first quarter.

Tesla’s deliveries slumped in the first quarter for the first annual drop since the start of the pandemic in 2020, missing analyst forecasts by a mile in a sign that even price cuts haven’t been able to stave off an increasingly heated competition on the EV market.

Tesla attributed the lower deliveries to “the early phase of the production ramp of the updated Model 3 at our Fremont factory and factory shutdowns resulting from shipping diversions caused by the Red Sea conflict and an arson attack at Gigafactory Berlin.”

So far this year, Tesla’s shares (NASDAQ: TSLA) have plunged by 41% amid concerns about the company’s future direction in the face of growing competition from legacy automakers and cheap Chinese EV models.

Earlier this month, reports emerged that Tesla was scrapping plans to manufacture a $25,000 EV.

The company has canceled these plans, Reuters reported, citing sources familiar with the matter and company messages it had seen.

Musk responded to a link with the report with a comment on X that “Reuters is lying (again).”

Shortly after this, Musk said that Tesla plans to unveil a Robotaxi on August 8.

Investors and analysts are now looking for clues about a possible change in direction from Tesla from plans for a cheap EV, especially after Musk posted on X last week that “going balls to the wall for autonomy is a blindingly obvious move.”

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:

• Oil Prices Start the Week Lower as Fears of a War Between Israel and Iran Fade
• China Scooped Up Record Volumes of Russian Oil In March
• Red Sea Could be Where Israel Strikes Next