Due to low car sales, Tesla’s profit in the first quarter of 2024 decreased by 55% compared to the same period in 2023. This increases investors’ concerns that Elon Musk’s company is losing ground in the electric car market, The New York Times reports.

In January-March of this year, the manufacturer’s profit amounted to $1.1 billion, while revenue decreased by 9% to $21.3 billion.

“A slump in earnings was seen as inevitable after Tesla said this month that sales in the first quarter fell 8.5 percent from a year earlier, and after the company announced plans to lay off more than 10 percent of its employees worldwide, or about 14 000 people,” the publication writes.

The cuts in jobs were seen as a sign that Tesla is trying to bring costs in line with falling revenues.

In the first quarter of last year, Tesla had one of the best margins in the industry, the company said a year ago. However, it cut prices and, as a result, earned less on each car sold.

For a while, it seemed that this strategy helped to increase the company’s sales. But even with this approach, Tesla now seems to be struggling to compete for customers.

According to the publication, Tesla investors are increasingly concerned that falling sales and profits are a symptom of larger problems, possibly indicating the company’s inability to effectively respond to growing competition from established automakers and new car manufacturers from China.