Tesla Q1 Profit Falls 55%

Tesla’s first-quarter net income plummeted 55%, but its stock price surged in after-hours trading Tuesday as the company said it would accelerate production of new, more affordable vehicles, reported Tom Krisher and David Hamilton for the Associated Press (AP).

Production of smaller, more affordable Tesla models will start ahead of previous guidance. I Photo: Tesla Asia X

The Austin, Texas, company said it made $1.13 billion from January through March compared with $2.51 billion in the same period a year ago. Investors and analysts were looking for some sign that Tesla will take steps to stem its stock’s slide this year and grow sales.

The company did that in a letter to investors Tuesday, saying that production of smaller, more affordable models will start ahead of previous guidance.

The smaller models, which apparently include the Model 2 small car that is expected to cost around $25,000, will use new generation vehicle underpinnings and some features of current models.

The company said it would be built on the same manufacturing lines as its current products. On a conference call with analysts, CEO Elon Musk said he expects production to start in the second half of next year “if not late this year.”