Despite price reductions on its electric vehicles and ‘Full Self Driving’ system, Tesla’s woes continue as the company grapples with declining sales and a plummeting stock price. Industry analysts question the demand for Teslas and other electric vehicles, citing a nearly 9% sales decline in the first quarter of 2024.
CEO Elon Musk remains optimistic, pinning his hopes on the long-awaited robotaxi as a potential catalyst for growth. However, analysts remain skeptical, fearing that delays or cancellations to the Model 2, a budget-friendly Tesla, could further hinder the company’s progress.
Tesla’s recent price cuts include $2,000 off the Models Y, S, and X in the U.S. and similar reductions in other countries like China. ‘Full Self Driving’ also received a price reduction, dropping by a third to $8,000. Despite these measures, Tesla shares fell further on Monday, extending the year-to-date decline to nearly 43%.
Bank of America Global Research analyst John Murphy highlights Tesla’s challenges, including weaker EV sales and production exceeding demand. While acknowledging potential growth drivers like the robotaxi and Model 2, Murphy maintains a neutral rating on the stock.
Despite Musk’s claims that price adjustments align with industry practices, Tesla manufactured over 46,000 more vehicles than it sold in the first quarter. The company’s workforce reduction of 10% and the departure of key executive Andrew Baglino further add to the uncertainty.
Tesla’s ‘Full Self Driving’ system, marketed as capable of autonomous driving, remains a partially automated driver assist system. The National Highway Traffic Safety Administration recently ordered a recall of the system due to safety concerns.
Industry experts, such as Sterling Anderson of Aurora Innovation, question the sole reliance on cameras for autonomous driving. Anderson emphasizes the limitations of cameras in low-light conditions, highlighting the need for additional sensors like lidar and radar. Raj Rajkumar of Carnegie Mellon University also raises concerns about the inability of computers to anticipate all possible scenarios on the roads.
Musk’s dismissal of lidar technology, claiming that humans can drive with just their eyes, has drawn criticism. Experts argue that the complexity and diversity of road conditions demand more robust and reliable sensing systems.
