Tesla reports a drop in sales and profit, will speed up the production of more affordable cars

Revenue fell nine percent to $21.3 billion in the first quarter. Sales volume fell by nearly nine percent due to increased competition and slowing demand for electric cars. Earnings per share excluding one-time items were 45 cents, falling short of the estimate of analysts polled by FactSet, who had expected earnings of 49 cents per share.

Investors and analysts have been looking for any sign that Tesla will take steps to halt this year’s slide in its stock price and boost sales, the AP reported. In a letter to investors, Tesla said that production of smaller and more affordable models will begin earlier than it had previously anticipated.

The smaller models, which apparently include the Model 2 small car priced at around $25,000, will use the chassis of the next-generation cars and some elements of the current models. They will thus be produced on the same production lines as the current models, and new factories and new production lines will not be needed for new cars.

CEO Elon Musk said in a conference call with analysts that he expects to start production in the second half of next year, but it could be as late as this year.

Tesla reiterated that car sales growth this year could be noticeably lower than last year as it works to launch a new generation of the car. According to many analysts, weaker sales raise questions about demand for Teslas and other electric cars.

Tesla shares are down more than 40 percent since the start of this year. However, after the official end of trading in the US on Tuesday, they began to rise and at one point gained as much as 12.5 percent.