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What’s happening: Shares of Tesla climbed in after-hours trading on Tuesday, after the company released its results for the first quarter.
What happened: The EV maker reported weaker-than-expected sales and earnings for the latest quarter.
However, Tesla said its plans for starting the production of new vehicles remain on track for the year.
How were the results: The Austin, Texas-based company reported a single-digit decline in sales for the quarter.
Why it matters: Tesla’s profits plummeted to a five-year low, net income down 71% to $409 million during the three months ending March. This marked the company’s weakest quarter since 2020 due to stalled demand for EVs, tariff concerns and consumer protests against Elon Musk’s association with Donald Trump’s MAGA movement.
Tesla reported an overall decline in revenues in the first quarter, with automotive revenue contracting 20% year-over-year to $13.97 billion due to fewer deliveries and lower average selling price.
The company delivered 336,681 vehicles in the first quarter, compared to 386,810 vehicles in the year-ago quarter. The figure fell significantly short of consensus estimates of 377,592 vehicles. Tesla produced 362,615 vehicles during the first quarter, compared to 433,371 vehicles a year earlier.
“It is difficult to measure the impacts of shifting global trade policy on the automotive and energy supply chains, our cost structure and demand for durable goods and related services,” Tesla said in a statement.
The company said it would revisit its forecast for 2025 during the second-quarter update.
Investors responded positively to Musk’s statements during the earnings call indicating plans to reduce his time working with DOGE (Department of Government Efficiency). “I think starting probably next month, May, my time allocation to DOGE will drop significantly,” he said.
How shares responded: Tesla’s shares gained 5.4% to $250.80 in after-hours trading on Tuesday following the release of quarterly results. The stock has lost around 15% over the past month.
What to watch: Investors will continue monitoring the launch of new vehicles, which is expected to significantly impact the company’s overall results ahead. Tesla said it is still looking to begin production of more affordable models during the first half of 2025.
The company’s Robotaxi product, which is powered by AI, is also scheduled to start volume production in 2026.
Context: The EUR/USD forex pair moved lower this morning as investors digested the latest economic data.
Details: Investors remain concerned about the impact of US President Trump’s recent tariff announcements on trade with Europe.
Data released on Tuesday showed that Eurozone’s consumer confidence indicator fell for the second straight month to a reading of -16.7 in April. The figure came in below market estimates of -15. The region’s consumer morale also dipped to the weakest level since November 2023.
The government deficit to GDP ratio in the Eurozone improved to 3.1% in 2024, from 3.5% in the previous year.
The European Central Bank had last week cut interest rates for the seventh time in the year, taking rates to their lowest mark since late 2022.
Strength in the US dollar weighed on the EUR/USD forex pair this morning. The US dollar index, which measures the greenback’s performance versus a basket of major peers, rose around 0.3% to 99.17.
The EUR/USD pair fell around 0.2% to 1.1398 this morning, while the EUR/GBP forex pair slipped around 0.1%.
What to watch: Investors await the release of economic data on HCOB manufacturing PMI (1200 UAE Time), HCOB services PMI (1200 UAE Time) and balance of trade (1300 UAE Time) from the Eurozone today. Analysts expect the HCOB Eurozone manufacturing PMI to decline to 47.5 in April, from 48.6 in March, while services PMI is projected to fall to 50.5 in April, from 51.0 in the previous month.
The Eurozone had recorded a trade surplus of €1 billion in January and this is expected to widen to €15.1 billion in February.
Other Markets: US trading indices closed higher on Tuesday, with the Dow Jones index, S&P 500 and Nasdaq 100 up by 2.66%, 2.51% and 2.63%, respectively.
Ukrainian President Volodymyr Zelenskyy proposed to halt drone and cruise missile attacks on civilian targets for at least 30 days. Despite this, the RUB/USD pair moved lower in forex trading this morning.
India’s economic growth forecast for the current fiscal year was lowered by the International Monetary Fund from 6.5% to 6.2%, exerting pressure on the INR/USD forex pair.
Japan’s au Jibun Bank manufacturing PMI edged higher to 48.5 in April, from 48.4 in the previous month. The region’s manufacturing activity contracting for the 10th straight month sent the JPY/USD pair lower in forex trading this morning.
South Korea’s Composite Consumer Sentiment Index rose to 93.8 in April, from 93.4 in March. However, views on current domestic economic conditions falling by 3 points to a reading of 52 exerted pressure on the KRW/USD forex pair.
The American Petroleum Institute reported that US crude oil inventories declined by 4.565 million barrels in the week ending April 18, compared to a gain of 2.4 million barrels in the previous week, which sent the WTI crude oil prices higher this morning.
Eurozone’s HCOB composite PMI (1200 UAE Time) and construction output (1300 UAE Time), South Africa’s inflation rate (1200 UAE Time), UK’s S&P Global manufacturing PMI (1230 UAE Time), S&P Global services PMI (1200 UAE Time) and S&P Global composite PMI (1230 UAE Time), US MBA mortgage applications (1500 UAE Time), S&P Global composite PMI (1745 UAE Time), S&P Global manufacturing PMI (1745 UAE Time), S&P Global services PMI (1745 UAE Time), new home sales (1800 UAE Time), EIA crude oil stocks change (1830 UAE Time), EIA gasoline stocks change (1830 UAE Time), EIA distillate stocks change (1830 UAE Time), EIA heating oil stocks change (1830 UAE Time) and Fed Beige book (2200 UAE Time), Russia’s corporate profits (2000 UAE Time) and industrial production (2000 UAE Time), Mexico’s retail sales (1600 UAE Time), Canada’s new housing price index (1630 UAE Time), as well as Argentina’s retail sales (2300 UAE Time).
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