Tesla profits fell 55% in the first quarter as a protracted EV price-cutting strategy cut into the automaker’s bottom line.

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    Tesla profits fell 55% to $1.13 billion in the first quarter from the same year-ago period as a protracted EV price-cutting strategy and “several unforeseen challenges” cut into the automaker’s bottom line.

    The company said in its Q1 earnings report that it experienced “numerous challenges” in the first quarter, including the Red Sea conflict and the arson attack at Gigafactory Berlin and the gradual ramp of the updated Model 3 at its factory in Fremont, California.

    Despite the downward trend in profits, Tesla used the first-quarter report to focus on the future, namely about using AI to make advances in autonomy and the introduction of new products, including those built on a next-generation vehicle platform.

    Two high-profile executives — Drew Baglino, Tesla’s SVP of Powertrain and Energy, and Rohan Patel, VP of Public Policy and Business Development — also left the company.

    Tesla CFO Vaibhav Taneja said Tuesday during the earnings call that the savings generated from the workforce reduction is expected to be well in excess of $1 billion on an annual basis.

    That revenue source should increase as more automakers, including Ford, GM, Rivian and VW adopt Tesla’s technology known as North American Charging Standard.


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