Tesla reported a big drop in quarterly profits Tuesday amid an increasingly cutthroat electric vehicle market, but shares rallied as CEO Elon Musk pledged to accelerate plans for a more affordable EV.

Tesla reported profits of $1.1 billion, down 55 percent from the year-ago quarter on revenues of $21.3 billion, down nine percent as the company described EV sales as "under pressure."

But shares rocketed up more than 11 percent in after-hours trading after Tesla pledged to "accelerate" new more affordable autos -- something Wall Street analysts have been clamoring for.

The results, which lagged analyst estimates, come as investors have sought greater strategic clarity from Musk amid a weaker performance and as the mercurial Tesla boss has touted Robotaxis as a venture at a time when there are increasing questions about the timeframe that autonomous technology will be commercially viable.

The company, which recently announced layoffs of some 14,000 workers, has also undertaken a recall of its Cybertruck due to an acceleration problem.

Cutting headcount by more than 10 percent will save Tesla more than $1 billion annually in costs, said Chief Financial Officer Vaibhav Taneja on a conference call with analysts.

In spite of the belt-tightening, Tesla's report did provide some news likely to cheer investors, saying it planned to "accelerate the launch of new models ahead of our previously communicated start of production in the second half of 2025."

The new vehicles will include "more affordable models," Tesla said.

At the outset of Tuesday's conference call, Musk said production on the vehicles would start in early 2025 or in late 2024, up from the prior timeframe of the latter half of 2025.

The vehicles "will use new aspects of the next generation platform as well as aspects of our current platform," Musk said. "So it's not contingent on any new factory or massive new production line."

Musk declined to elaborate on the plan, saying more details would be released in August.

The Tesla CEO spoke at length about the promise of Tesla's autonomous ventures, saying valuing the EV maker like a car company is the "wrong framework."

"If somebody doesn't believe Tesla is going to solve autonomy I think they should not be an investor," he said.

The statement about new vehicles comes on the heels of speculation that Tesla is shelving plans for the "Model 2," the unofficial name of what is expected to be a mass-marketed, lower-priced vehicle.

While Tesla's statements about new vehicles boosted shares, "the company still hasn't offered timelines for these new vehicles, which could take years to come to market at a time when EV competition in various markets is intensifying," said Gadjo Sevilla, senior technology analyst at Emarketer.

Tesla also said Tuesday it will continue to pursue a "revolutionary" manufacturing strategy on a "purpose-built robotaxi product."

Leading analysts have expressed skepticism about the embrace of the Robotaxi venture.

Deutsche Bank analysts last week downgraded Tesla to a "hold," pointing to disappointments about the rumored Model 2 delay that weren't offset by the Robotaxi push.

Musk's announcement that the Robotaxi will be unveiled in August "in no way means the technology is ready," said Deutsche Bank, which pointed to "technological, regulatory and operational challenges" that could hamper its commercial prospects.

"We worry there is considerable execution risk to the development of Robotaxi technology and that a fleet deployment could be years away," Deutsche Bank said.

Shoggi Ezeizat, analyst at Third Bridge, said Tesla's ambitious push in robotaxis "could provide a competitive edge" with "sustained and robust" commitment.

However, the campaign "carries significant risks," including regulatory challenges, scaling demands and the potential for setbacks "that could impede progress and affect consumer trust in autonomous services," Ezeizat said.

Heading into 2024, Tesla watchers were already girding for a tougher path, with Musk's once-dominant leadership in EVs facing more competition from rivals, resulting in a series of price cuts.

But things have been bumpier than expected, with news of the job cuts and lower vehicle deliveries followed late last week by Tesla's recall of the Cybertruck due to an acceleration problem.