Tesla shares closed up 12% on Wednesday after CEO Elon Musk said the electric vehicle company plans to start production of new affordable EV models by early 2025.

Musk’s comments came during Tesla’s earnings call on Tuesday, after the company reported disappointing first-quarter numbers. Revenue fell 9% year over year, its steepest annual decline since 2012.

The company previously expected to begin production of the new EV models in the second half of 2025. Tesla has not disclosed any details about affordable new models in development. Typically, the company promotes design concepts years in advance of production at “reveal” events.

Tesla reported 45 cents in adjusted earnings per share on revenue of $21.3 billion, which was below the 51 cents expected per share and $22.15 billion in expected sales, according to LSEG.

Revenue was down from $23.3 billion a year earlier and from $25.17 billion in the previous quarter.

Analysts at Bank of America said in a note to investors on Wednesday that Tesla’s first-quarter results and management commentary “addressed key concerns” and “revived the growth narrative,” prompting them to upgrade the stock from neutral to buy. while maintaining their $220 price target.

Elon Musk speaks on stage during The New York Times Dealbook Summit 2023 at Jazz at Lincoln Center in New York, November 29, 2023.

Slaven Vlasic | Getty Images

They also expressed bullish optimism that Tesla is demonstrating a positive business outlook as it prepares to launch new vehicle models and license its driver assistance system.

“In the near term, the news flow seems to suggest that the risk to equities is skewing more to the upside,” the analysts wrote.

On Tuesday, UBS analysts reiterated their neutral rating on Tesla shares and cut their price target to $147 from $160, saying they remained skeptical of the company’s talks.

“Increasingly, TSLA is an autonomy play, and while progress is being made, we are cautious about near-term viability,” they wrote in a note. “We see limited growth for the current lineup and a lack of clarity on what these ‘new vehicles’ can deliver.”

— CNBC’s Michael Bloom and Laura Kolodny contributed to this report.

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