Tesla jumps as Musk's promise of 'more affordable' cars eases growth fears
(Reuters) - Tesla shares surged 10% on Wednesday after the electric-car maker eased some worries about growth with a prediction that sales would rise this year and said it would roll out more affordable models in early 2025.

The news cheered up investors who were bracing for the worst after a tumultuous week at Tesla that saw big layoffs, executive exits, price cuts and the postponement of a highly touted meeting with the Indian prime minister.

It also helped Wall Street shrug off the company's weak results that included its first quarterly revenue decline in nearly four years and a lower-than-expected profit.

"First impression for us is CEO Elon Musk is appeasing the market by accelerating new product launches," Jefferies analysts, led by Philippe Houchois, said in a note.

The company was on track to add nearly $50 billion to its market value, based on premarket movements. Its stock is down 42% so far this year amid fierce competition and falling sales.

The growth strategy could strengthen shareholder support for a vote in May on the $56 billion compensation package for CEO Elon Musk that was voided by a Delaware court in January.

Some Tesla investors such as Ross Gerber - president and CEO at Gerber Kawasaki Wealth & Investment Management - had said in recent days that they planned to oppose the package, citing a decline in Tesla's share price and a compromised board.

Several analysts took Tesla's remarks that its cheaper models would be built using current platforms and production lines meant as a sign it had retreated from more ambitious plans for an all-new model that had been expected to cost $25,000.

"We read 'more affordable' as potentially de-contented Model Y/Model 3 versions with improvements in software and AI/hardware capability but at lower prices," Morgan Stanley analyst Adam Jonas said.

Musk declined to provide details of the more-affordable models, and instead spent much of the earnings call on Tesla's efforts to diversify its business with AI, humanoid robots and operating a fleet of autonomous vehicles - all based on software and hardware products it has not yet fully developed.

"While the details (on the new models) are thin on the ground, this was a clever move by Musk, as it justifies the negative cash flow and the higher capital spend," said Kathleen Brooks, research director at XTB.

"Unlike many companies that are shrinking capital spend in the current environment, Tesla is going against the grain ... and puts (it) in a strong position as the EV market gets more competitive and price sensitivity increases," Brooks added.

(Reporting by Aditya Soni and Reshma Rockie George in Bengaluru and Danilo Masoni in Milan, editing by Alun John and Saumyadeb Chakrabarty)
Technology
(Reuters) -     Tesla shares surged 10% on Wednesday after the electric-car maker eased some worries about growth with a prediction that sales would rise this year and said it would roll out more affordable models in early 2025.