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Tesla profit plunges on price cuts, but company unveils plans for affordable models

Tesla says profits fell 55 percent in the first quarter to $1.13 billion while revenue declined 9 percent

Tesla reported a steeper-than-expected 55 percent plunge in profit for the first quarter but managed to avoid a major beating on Wall Street on Tuesday by declaring a flurry of bold commitments that appeared to satisfy investors: ramping up the production timeline of a more "affordable" car, doubling down on its fully autonomous "Cybercab" and outlining nearly $1 billion in cost savings from job cuts.

Analysts called Tuesday's earnings report a "make or break moment" for the electric-vehicle maker as it continues to struggle with falling sales, stiff competition from China and uncertainty over its business outlook. Tesla's earnings report was indeed grim: For the three months ended March 31, net income fell 55 percent from a year earlier to $1.13 billion while revenue fell 9 percent to $21.3 billion.

CEO Elon Musk, who has a unique penchant for redirecting the conversation, used Tuesday's earnings call to deflect from the poor numbers, focusing instead on the company's commitment to artificial intelligence and a fully autonomous car. Details on Tesla's apparent new offerings - which include the "more affordable models" and the "cybercab" - were scant and did not address how the company would overcome the technological and regulatory hurdles ahead.


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