(RightWing.org) – Billionaire Elon Musk has experienced several financial problems over the last few years. For instance, the latest available figures indicate that the value of X, the social media platform previously known as Twitter, has dropped 71%, from Musk’s October 2022 purchase price of $44 billion to roughly $12.5 billion earlier this year. Likewise, the Big Tech site’s usage has dropped by 23%. A recent report indicates that Tesla’s profits halved amid a massive sales slump.
On April 23, Tesla released its first quarter (Q1 2024) update, detailing its vehicle production figures, various expenses, profit, and earnings per share (EPS) for individuals holding shares in the electric vehicle (EV) company.
The statement showed that EPS fell a whopping 53.42% year-on-year. In Q1 2023, the “EPS attributable to common shareholders” averaged $0.73 compared to $0.34 in Q1 2024.
Typically, a negative EPS year-on-year indicates a company experienced increased costs, decreased revenues, or had more shares outstanding, which dilutes earnings among shareholders. Tesla’s report showed that operating costs increased by 37%, causing a significant decline in earnings per share. Additionally, car sales fell by 13%, a considerable drop considering that EV sales account for roughly 82% of Tesla’s total revenues.
Equally concerning, Tesla registered a $441 million cash inflow in Q1 2023, but the company’s report showed a $2.5 billion outflow. Several investment sites attributed the year-on-year gap to a $2.7 billion inventory increase because the company sold fewer cars than it produced in Q1 2024.
An operational summary in Tesla’s report showed that the company produced 433,371 vehicles but only delivered 386,810. Year-on-year production fell by 2% in Q1 2024, and deliveries dropped 9%.
Tesla noted several challenges it faced in Q1 2024, such as an arson attack at its Gigafactory 4 in Grünheide, Germany, the gradual increase in production of the updated Model 3 in Freemont, California, and the ongoing Red Sea conflict. The company also cited continued stressors on global EV sales since many auto manufacturers prioritize hybrid vehicles over newer electric ones.
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