NEW YORK: Tesla Inc is accelerating the launch of more affordable models in a bid to arrest a deterioration in its profit margins and sales.

The electric-vehicle (EV) maker plans to start production on the cheaper cars before the second half of 2025, when it had previously pledged to begin making them.

The Elon Musk-led company has been coping with a sales slump as EV demand falters.

Tesla’s adjusted earnings per share came to 45 US cents in the first three months of the year, compared with Wall Street’s expectation of 52 cents a share.

Revenue fell 9% to US$21.3bil, according to a statement, in line with its first year-over-year drop in deliveries since 2020. That was still short of the US$22.3bil analysts expected.

Tesla also kept its near-term growth expectations in check, saying deliveries may be lower than last year.

“In 2024, our vehicle volume growth rate may be notably lower than the growth rate achieved in 2023, as our teams work on the launch of the next generation vehicle and other products,” it said.

The EV maker’s strategy has been muddled for much of 2024.

It’s spent the last year slashing prices across its lineup in an effort to boost sales volume, only to find demand for its vehicles slowed.

Adding to Tesla’s woes has been Musk’s abrupt decision to go “balls to the wall” on a dedicated robotaxi for which the company lacks regulatory approval and possibly the technological capability.

Investors had expected the company to instead focus on a new, US$25,000 model that Musk had promised to go into production before the end of next year.

Tesla gave no timeline, but said it’s continuing to pursue a new module-based “unboxed” manufacturing process for its promised robotaxi model. In a reflection of leaner times, Tesla noted those new models will be built on existing manufacturing lines at current factories to maximise capacity and grow “prudently.”

It wasn’t immediately clear if Tesla’s “more affordable models” pledge was a reference to the long-discussed low-cost car, sometimes dubbed the Model 2.

 - Bloomberg