Tesla’s first-quarter net income plummeted 55% compared to the same period last year, dropping from $2.51 billion to $1.13 billion. Investors and analysts welcomed the news of the company’s plans to expedite production of more affordable vehicles. Tesla plans to introduce these smaller models ahead of earlier projections, utilizing the same manufacturing lines as its current products. CEO Elon Musk anticipates production to commence in the second half of the year or potentially sooner.
Musk provided limited details about the new vehicles, whether they would be variations of existing models, or their specific price points. Despite the lack of specifics, Musk expressed confidence that Tesla will surpass last year’s sales figure of 1.8 million vehicles.
Tesla is placing significant reliance on its upcoming fully autonomous robotaxi as a catalyst for future earnings growth. The company is set to unveil the robotaxi on August 8.
Tesla’s first-quarter revenue declined by 9% year-over-year to $21.3 billion due to increased competition and a slowdown in electric vehicle demand. Excluding one-time expenses such as stock-based compensation, Tesla’s earnings per share reached 45 cents, falling short of analyst estimates of 49 cents.
Tesla recently lowered the prices of its Model Y, S, and X variants in the US and reportedly made similar adjustments in other countries, including China. Additionally, the cost of its “Full Self Driving” package was reduced by one third to $8,000.
Last week, Tesla announced plans to cut 10% of its 140,000-strong workforce, with the reductions affecting all levels of the organization. Musk views this move as necessary to optimize the company’s growth trajectory.
Musk has consistently promoted the robotaxi as a key growth driver for Tesla since the hardware was introduced in late 2015. He initially projected a fleet of autonomous robotaxis by 2020, which would generate revenue for Tesla owners and increase the value of their vehicles. However, these plans have faced delays, and the robotaxis remain in the testing phase, with owners assisting in data collection for the company’s computer systems.
Neither Musk nor other Tesla executives provided a specific timeline for when Tesla vehicles would achieve full self-driving capabilities. Instead, Musk emphasized the latest version of Tesla’s autonomous driving software, which operates under the misleading title of “Full Self Driving.” He asserted that it won’t be long before Tesla’s autonomous driving capabilities surpass human reliability.
Musk further suggested the possibility of enabling self-driving capabilities across Tesla’s entire fleet of vehicles, although he did not specify a timeframe. He emphasized the belief that those who doubt Tesla’s ability to achieve autonomous driving should reconsider their investment in the company.
Early last year, the National Highway Traffic Safety Administration required Tesla to recall its “Full Self-Driving” system due to its tendency to malfunction around intersections and its failure to consistently adhere to speed limits. Tesla also recalled its less advanced Autopilot system to enhance its driver monitoring capabilities. Certain experts express skepticism that systems relying solely on cameras, like Tesla’s, can ever fully achieve autonomous driving.
