Musk promised cheaper cars. Tesla’s shares thus rose sharply despite the miserable results

Tesla earned only 1.13 billion dollars (26.8 billion CZK) in the first quarter, while in the same period a year ago, the profit was 2.51 billion. In addition, the company’s revenue fell for the first time in four years, down nine percent to $21.3 billion.

The sales volume itself fell by almost nine percent due to increased competition and slowing demand for electric cars.

Such results in most cases mean a sharp drop in shares, but not for Tesla. Although its shares are not doing well this year, having already lost 40 percent, on Wednesday before the opening of the stock exchange, however, there was a recovery in the form of a jump of up to 13 percent.

Tesla makes it cheaper. Due to a sharp decline in sales

Economy

Reason? Elon Musk and his promise to produce cheaper models that Tesla will introduce at the beginning of next year, maybe at the end of this year.

The manufacturer did not disclose details of the upcoming models. According to the British broadcaster BBC, the automaker could revive plans to produce the Model 2, a cheaper car that it canceled a few weeks ago.

It was the announcement of more affordable electric cars, according to Purple Trading analyst Petr Lajsko, that overshadowed the already mentioned very bad numbers for the first quarter.

“Tesla is far from the growth company we were used to from previous years. In my opinion, the current euphoria can wear off very quickly,” Lajsek told Novinkám.

Photo: Reuters

Elon Musk

“In addition, there is currently talk in the US that interest rates may not fall at all this year. This may overall push US stocks to lower values, and I would not be surprised by a correction to somewhere around $125 for Tesla by the end of the year,” he added.

The value of one Tesla share was almost $145 after the close of trading on Tuesday.

As for the long-term development of Tesla shares, a lot will depend on the performance of the Chinese economy, which is troubled by deflation and problems in the real estate market, Lajsek believes, adding that the signals so far do not point to improvement, and thus the demand for electric cars in the largest market, which is precisely in China, it could have been suppressed longer.

“However, Tesla and its fan base should not be underestimated. If there is a significant reduction in interest rates in the US and the new, cheaper model is a hit, Tesla shares may again attack levels well above $200 next year,” the analyst added.