Tesla's revenue and profit tumbled in the first quarter, but the company promised to speed up the development of new vehicles as it encounters stiff headwinds in the EV space.

Why it matters: Tesla is grappling with slumping sales, increased competition and questions over its spending priorities.

Driving the news: The company on Tuesday reported revenue of $21.3 billion and net income of $1.13 billion in the first quarter, down 9% and 55% from the same period a year earlier.

• The performance fell short of S&P Capital IQ estimates of $22.26 billion in revenue and $1.48 billion in net income.

Between the lines: In an earnings presentation, Tesla acknowledged "numerous challenges," including logistical hurdles in producing and delivering the recently refreshed Model 3 sedan.

• The company said it is "expanding vehicle financing programs," including "attractive leasing terms" after vehicle deliveries fell 8.5% in the first quarter, compared with a year earlier.

The automaker has responded to the sales slump by implementing cost cuts, including the previously announced intent to cut 10% of its workforce, which totaled about 140,000 people as of 2023.

• "We are focused on profitable growth," Tesla Tuesday.

Yes, but: After a recent Reuters report that the company had canceled the development of an affordable vehicle dubbed the Model 2 — a report CEO Elon Musk denied — Tesla on Tuesday said it's moving faster on new vehicles.

• "We have updated our future vehicle line-up to accelerate the launch of new models ahead of our previously communicated start of production in the second half of 2025," Tesla said.
• Musk said on an earnings call that production would likely being in "early 2025 if not late this year" and that the debuts will include "more affordable models."
• "We'll use aspects of the next-generation platform as well as aspects of our current platforms," he said.

Zoom in: Tesla shares were up roughly 11% in after-hours trading following release of the earnings call, when Musk also said:

• Tesla is in negotiations to license its partial self-driving system to a large automaker and could sign a deal this year.
• The company's pursuit of fully autonomous vehicle technology is essential to its valuation.
• Tesla would achieve autonomous vehicle breakthroughs "even if I got kidnapped by aliens tomorrow," though it might take longer to get there.

What's next: Musk said the company would provide more details about its next-generation vehicles when it introduces a robotaxi at an event Aug. 8.

Editor's note: This article has been updated with details from Elon Musk's earnings call.