Tesla's Q1 2024: Performance declined significantly, but it didn't hinder the after-hours surge.

After the market closed on April 23, 2024, Tesla, which has been questioned by the market, released its first-quarter 2024 earnings report.

In terms of performance, in the first quarter of 2024, Tesla achieved revenue of $21.3 billion, operating profit of $1.17 billion, and adjusted earnings per share of $0.45, all of which were below market expectations.

In the first quarter, Tesla's revenue from automotive-related businesses was $17.378 billion, down 13% from $19.963 billion in the same period last year.

Tesla's earnings report is clearly a bad signal.

This marks Tesla's first revenue decline in four years and the largest single-quarter drop since 2012. Additionally, the company's gross margin is also declining rapidly.

Previously, Tesla's first-quarter delivery data also showed that this was the worst delivery performance in recent quarters, and it seems that Tesla is facing a situation of oversupply.

All signs seem to indicate that Tesla's high growth has reached an inflection point. In the secondary market, as of the close on April 23, Tesla's market capitalization has fallen from its peak of $1.3 trillion in November 2021 to $460.8 billion, a loss of approximately $840 billion.

Faced with such performance, Wall Street has also lowered its price targets for Tesla: Mizuho reduced Tesla's target price from $195 to $180. UBS cut Tesla's target price from $160 to $147. Truist Securities lowered Tesla's target price from $176 to $162. Canaccord Genuity reduced Tesla's target price from $234 to $222. RBC lowered Tesla's target price from $294 to $293.

Tesla's predicament is likely what the entire new energy vehicle industry will face in overseas markets in the near future. As the new energy market cools, the popularity of new energy vehicles overseas has begun to decline. Moreover, given the traditional preferences in the U.S., most consumers have limited interest in new energy vehicles.

Tesla has a relatively small SKU lineup, with current bestsellers including the Model X, Model Y, Model S, and Model 3. Although Tesla also launched the Cybertruck last year, limited production capacity means deliveries are temporarily on hold. Meanwhile, Tesla continues to invest in new factories for its new products, and the massive capital expenditures have become a nightmare for the company.

However, beyond new energy vehicles, Tesla is also exploring additional growth avenues.

First is the company's energy storage business. From the revenue structure, the energy storage business is becoming an increasingly significant part of Tesla's income. Next is Tesla's highly valued autonomous driving business.

Recent updates from Tesla show that its FSD (Full Self-Driving) technology has garnered growing interest from potential partners, with some willing to make purchases.

However, these developments are not enough to restore market confidence.

During the first-quarter earnings call, Elon Musk delivered major good news, stating that Tesla's low-cost model will begin production by early 2025 at the latest, and that this year's sales will exceed last year's.

Tesla's upcoming affordable model may be named the Model 2, with an expected price of around 150,000 yuan. This pricing will enable Tesla to compete fiercely with lower-priced models.

Additionally, Tesla plans to start selling its humanoid robot, Optimus, by the end of next year at the earliest.

Driven by these announcements, Tesla's after-hours trading surged by 12%.

Shortly after the earnings call, Tesla rolled out significant car purchase incentives.

First, the company introduced a "zero down payment" policy for the Model 3 and Model Y.

Next, Tesla launched a new product—the high-performance version of its compact sedan, the Model 3, priced at $52,990 in the U.S.

Meanwhile, Tesla's China website shows that the new Model 3 high-performance version is priced at 335,900 yuan in China, with deliveries expected to begin in the third quarter of this year.

Previously, Tesla had already implemented significant price cuts, with the starting prices of the Model 3 and Model Y in China reduced to 231,900 yuan and 249,900 yuan, respectively. This marks the first time the Model Y's starting price has dropped below 250,000 yuan.

The capital market has responded positively to Tesla's proactive measures.

In the long run, Elon Musk is an entrepreneur who does not disappoint investors. Over the years, he has consistently delivered one surprise after another in Tesla's development. From a long-term perspective, now may be a good time to buy Tesla at a low.