Despite its prosperous past, Tesla has experienced a significant shift in its fortunes over the past year. It has struggled to maintain its position among the so-called Magnificent 7, a group of high-performing tech stocks that drove the major indexes in 2023.
The company reported US$2.8 billion in capital expenditures, a 34 percent increase from last year, citing new cost-saving measures to “increase operational efficiency”. The company also expanded accessibility to its Full Self-Driving by reducing the cost of subscription to US$99 per month or US$8000 to purchase.
The company confirmed that it would be ramping up the development of autonomous driving technology but would also increase efforts to develop more affordable models. Development of the Model 2 appears to be going forward, with production set to start ahead of the previously projected mid-2025.
“We have sufficient liquidity to fund our product roadmap, long-term capacity expansion plans and other expenses. Furthermore, we will manage the business such that we maintain a strong balance sheet during this uncertain period,” wrote Musk, looking ahead to 2024.
The market responded favorably to the news, with shares jumping almost 8 percent roughly 10 minutes after the report’s release. The share price peaked at US$158.59 about an hour later, almost 10 percent higher than its closing price, before beginning a slight descent. As of writing, Tesla is trading for US$144.68.
Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.
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