Tesla’s Strategic Move: Introducing New Models Despite Profit Setback

Tesla is accelerating the release of new vehicle models in response to a significant decline in profits. The electric car manufacturer, led by Elon Musk, reported a profit of $1.13 billion in the first quarter of the year, down from $2.51 billion in the previous year.

To reverse its fortunes, Tesla announced plans to cut over 6,000 jobs at its Texas and California facilities. Facing reduced demand and competition from more affordable Chinese imports, Tesla’s stock price plummeted by 43% in 2024. However, the decision to expedite the launch of new models in 2025 caused a surge in its shares by 12.5% during after-hours trading.

While pricing details of the upcoming vehicles were not disclosed, Elon Musk is set to discuss the new models, potentially including the Model 2, in an investor conference call. In response to declining sales, Tesla has been lowering prices in various markets to attract new customers.

The company acknowledged the challenges in the global electric vehicle market, citing the preference of many car manufacturers for hybrids over EVs. Additionally, the influx of competitively priced Chinese models has intensified the pressure on Tesla.

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