Musk lowers his nose due to Tesla earnings shock: “Launch low-cost electric vehicle early next year”

Electric vehicle popularity cools, Chinese companies’ low-price offensive sales drop 9%, the largest decline in 12 years Tesla’s stock price surges 13% in after-hours trading after Musk’s remarks about producing low-priced models

《’Net profit halved’ earnings shock Tesla “launches low-cost electric car early next year”


Tesla, a symbol of electric vehicles, saw its net profit plummet by 55% in the first quarter of this year (January to March) compared to the same period last year. First quarter sales also decreased by 9%. This is due to the deterioration of Tesla’s profitability due to the offensive of low-cost electric vehicles made in China. CEO Elon Musk said on the 23rd, “We will be able to see (low-cost) vehicles in early 2025.” With Tesla joining the ranks, the competition for low prices for electric vehicles is expected to intensify further. 》


Tesla, an American electric vehicle company, announced on the 23rd (local time) that net profit in the first quarter (January to March) decreased by 55% compared to the same period last year. First quarter sales were $21.31 billion (approximately 29.3 trillion won), a 9% decrease compared to the same period last year. This is the first decline since the second quarter of 2020, when the production line was hit by the novel coronavirus infection (Corona 19), and the largest decline since 2012. Free cash flow was also negative by about $2.5 billion. However, despite the ‘earnings shock’ performance, Tesla CEO Elon Musk said, “We will see (low-price) vehicles in early 2025,” and said, “We will increase sales with low-priced models and rush into the future with humanoid robots and autonomous driving.” When the company announced its intention to do so, the stock price soared 13.3% in after-hours trading. Stock prices of domestic secondary battery companies such as LG Energy Solution and Samsung SDI also rose due to expectations that competition for electric vehicles will intensify, centering on low-priced models.

● “The moment that determines Tesla’s success or failure”

Tesla’s poor performance had been predicted due to the previously announced decrease in Tesla vehicle deliveries. CEO Musk said in a conference call that day, “There were unexpected challenges,” citing the slowdown in global demand for electric vehicles and the halt in production at a German factory. Analysts also told the Washington Post, “This is a ‘make-or-break moment’ for Tesla, which is struggling due to fierce competition from China and uncertainty about the outlook for the electric vehicle market.”

However, regarding traditional automakers such as General Motors (GM) shifting their focus to hybrid vehicles due to the ‘cold wind of electric vehicles,’ CEO Musk said, “It is not the right strategy.”

Regarding Tesla’s announcement in its earnings press release that it “will begin production of a new car line, including cheaper models,” CEO Musk expressed confidence that “we will be able to see (low-cost) vehicles in early 2025.” CEO Musk personally denied reports that the plan to launch Model 2, a low-cost electric car priced at $25,000 (approximately 34 million won), had been canceled. Currently, Tesla’s cheapest ‘Model 3’ is priced around $39,000.

Tesla’s stock price rose significantly in after-hours trading after CEO Musk’s remarks about producing low-cost models. The market judged that the low-priced model could be a breakthrough in Tesla’s slowing profits and stimulate demand for electric vehicles.

● “Competition for low-cost electric vehicles will intensify.”

In the automobile industry, competition over low prices for electric vehicles is expected to continue for some time. This is because, while the ‘electric vehicle chasm (temporary slowdown in demand)’ is deepening, electric vehicle companies are trying to win back consumers’ minds through price discounts. The recent offensive by Chinese electric vehicle companies with low-priced vehicles is also a factor encouraging low-price competition.

China’s BYD released the ‘Seagull’, an electric car with a starting price of only $10,000 last year. Xiaopeng, a Chinese electric vehicle company, also announced plans to launch a low-priced brand and launch entry-level vehicles at half the current selling price (200,000 to 300,000 yuan). Amid China’s low-price offensive, Kia also launched ‘EV3’, a compact electric vehicle expected to be priced around 30 million won in the first half of the year (January to June), and Hyundai Motor Company launched ‘Casper’, a compact electric vehicle priced at 20 million won, in the second half of this year (July to December). Enter the entry-level electric vehicle competition by launching ‘EV’. Competition for Tesla’s low-priced models next year is expected to heat up even more.

On this day, CEO Musk again emphasized that Tesla will not only focus on electric vehicles, saying, “Tesla is an artificial intelligence (AI) robotics company.” “Anyone who doesn’t believe we can solve the autonomous driving problem should not be an investor in Tesla,” he said. He also announced that the humanoid robot ‘Optimus’, which Tesla is developing, will be put into production at the end of this year and will be sold externally next year. Tesla has previously released videos showing Optimus making coffee and doing yoga.

New York = Correspondent Kim Hyun-soo [email protected]
Reporter Jaehee Han [email protected]