Mounting competition in the stuttering electric vehicle market is taking the juice out of Tesla. 

The automaker’s first-quarter profit plummeted 55% as falling global sales and price cuts sliced into the EV maker’s revenue and earnings. The company said Tuesday it made $1.13 billion in profit from January through March, compared with $2.51 billion in the same period a year ago. Revenue was $21.3 billion, down 9% from last year, the company said.

Tesla executives blamed the dip partly on EV sales being “under pressure as many carmakers prioritize hybrids over EVs.”

The weak earnings report landed on the same day Tesla announced it plans to lay off nearly 2,700 workers at its factory in Austin, Texas. The layoffs will happen during a two-week period starting June 14, according to a layoff notice. Tesla said last week that it’s planning to lay off more than 10% of its roughly 140,000 workers globally.

Tesla didn’t immediately respond to a request for comment. 

The latest financial results continue what has been tough stretch for Tesla this year. The company said earlier this month that it delivered 386,810 vehicles in the first quarter, almost 9% below the 423,000 it delivered in the year-ago period. Tesla blamed the decline partly on phasing in an updated version of the Model 3 sedan at its Fremont, California factory. 

Plant shutdowns due to shipping diversions in the Red Sea and an arson attack that knocked out power to its German factory also curtailed deliveries, according to Tesla. 

In another black eye for the company, Tesla said on April 19 that it is recalling nearly 4,000 Cybertrucks because of a faulty accelerator pedal. 

Tesla is facing increasing competition overseas and in the U.S. as automakers race to introduce new, and more affordable, EV models. Between 2018 and 2020, Tesla accounted for 80% of EV sales in the U.S., but that figure fell to 55% in 2023, according to Cox Automotive.

Although the pace of EV sales has dipped this year, the longer term forecast shows continued global growth. Automakers around the world will sell about 17 million EVs this year, up from 14 million last year, according to a recent estimate from the International Energy Agency (IEA). 

“Electric cars accounted for around 18% of all cars sold in 2023, up from 14% in 2022 and only 2% five years earlier, in 2018,” the IEA said. “These trends indicate that growth remains robust as electric car markets mature.”

And Tesla investors took heart Tuesday from Tesla vowing to accelerate its introduction of a low-cost vehicle, boosting the company’s shares in after-hours trading. 

—The Associated Press contributed to this report.