Tesla reported a significant drop in quarterly profits on Tuesday amidst intensifying competition in the electric vehicle market. Despite the decline, shares surged over 11% in after-hours trading following CEO Elon Musk’s commitment to hasten the development of more affordable EVs.

The electric car manufacturer revealed profits of $1.1 billion, down 55 percent from the same quarter last year, with revenues of $21.3 billion, a nine percent decrease. Tesla attributed the downturn to pressure in EV sales, reflecting the competitive landscape.

Investors, however, found optimism in Musk’s promise to expedite the release of new, affordable models, a move eagerly awaited by Wall Street analysts. The announcement marks a strategic shift amidst concerns over Tesla’s performance and the viability of its autonomous technology, particularly the timeline for commercial availability.

Despite recent layoffs affecting thousands of employees and a recall of the Cybertruck due to acceleration issues, Tesla remains focused on cost-saving measures. Chief Financial Officer Vaibhav Taneja stated that the reduction in headcount by over 10 percent would yield annual savings exceeding $1 billion.

Tesla’s commitment to advancing new vehicle launches ahead of the previously communicated schedule provides a glimmer of hope for investors. The forthcoming models are expected to utilize both current and next-generation platforms, with production slated to commence in early 2025 or late 2024.

Musk emphasized the significance of Tesla’s autonomous ventures, asserting that valuing the company solely as a car manufacturer is misguided. However, analysts remain cautious about the feasibility of Tesla’s ambitions, particularly regarding its robotaxi project.

While Tesla’s plans to introduce new vehicles boosted investor confidence, concerns persist over the absence of concrete timelines and the intensifying competition in the EV market. Analysts warn of potential hurdles, including regulatory challenges and scaling demands, which could impede Tesla’s progress.