Tesla plans to introduce new models amid major layoffs; shares surge

Tesla, the electric vehicle (EV) giant, has announced plans to introduce new vehicle models earlier than previously anticipated.

As per reports, this revelation, shared by CEO Elon Musk during a conference call with investors, propelled Tesla's shares up by nearly 11 per cent in after-hours trading.

This has brought fresh optimism to the company's prospects as challenges persist in the market.

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The announcement of upcoming models, including comparatively affordable options, indicates Tesla's rigorous efforts to revive its position in the EV market, which has seen increasing competition and a slowdown in sales.

According to a Business Today report, Musk's announcement indicated that the production of these new models may commence early this year but no later than early 2025.

Tesla's decision to introduce these new models utilising existing production lines is aimed at optimizing capital expenditures amid uncertain market conditions.

While more details are awaited, Musk hinted at their potential to incorporate elements from both current and next-generation platforms, although with potentially less cost reduction than initially anticipated.

Despite Tesla's recent quarterly results falling short of Wall Street's expectations, investors welcomed the news of forthcoming models.

Some analysts however, remained cautious, saying that Tesla had a track record of delays in product rollouts.

Tesla’s layoffs

The unveiling of Tesla's plans for new models comes against the backdrop of major layoffs within the company.

Tesla disclosed its intention to lay off 6,020 employees in Texas and California, as revealed in notices to the respective states.

These job cuts, scheduled to begin in June, are part of Tesla's restructuring efforts to mitigate challenges such as slowing demand and falling margins.

The reduction in workforce is Tesla's response to evolving market conditions and intensifying competition in the EV sector.

Despite the layoffs, Tesla's shares surged, breaking a seven-session losing streak and adding approximately $50 billion to its market capitalisation.

This rebound comes despite a decline in quarterly revenue for the first time since 2020, attributed to repeated price cuts, with net profit also experiencing a downturn compared to the previous year.

(With inputs from Reuters)