Automotive News Europe — 2024-04-23
Automotive Industry
Tesla said the new vehicles, including more affordable models, will use aspects of its next generation platform as well as aspects of our current platforms.
Tesla's first-quarter net income fell 55% to $1.1 bn while revenue dropped 9% to $21.3 bn, as the electric vehicle maker's deliveries slid globally.
"We experienced numerous challenges in Q1, from the Red Sea conflict and the arson attack at Gigafactory Berlin, to the gradual ramp of the updated Model 3 in Fremont," Tesla said in its quarterly earnings report on Tuesday, 23 April 2024.
Gross margin fell in the first quarter to 17.4% from 19.3% in the year-earlier period.
Also Tuesday, 23 April 2024, Tesla’s vice president of investor relations, Martin Viecha, announced his resignation. “I’ll continue to watch Tesla as a supporter and a shareholder for years to come,” Viecha said on the X social media platform. “But now, after a 7-year sprint, it’s time to take a break and spend a lot of time with my family.”
Updated vehicle line-up
Tesla also said that it was moving up the timeline for new products, without offering any details.
“We have updated our future vehicle line-up to accelerate the launch of new models ahead of our previously communicated start of production in the second half of 2025," the company said in its report.
"These new vehicles, including more affordable models, will utilize aspects of the next generation platform as well as aspects of our current platforms, and will be able to be produced on the same manufacturing lines as our current vehicle lineup.”
On the Tuesday (23 April 2024) earnings call, CEO Elon Musk repeatedly declined to discuss the automaker’s future products in detail. He would not say whether Tesla planned to move forward with a low-cost $25,000 vehicle or not. He said Tesla would provide more information when it reveals a “robotaxi or cybercab” autonomous vehicle in August 2024.
Rather, Musk said that Tesla would build new vehicles on its existing production lines instead of building new factories. Tesla in 2023 outlined its plans to build a factory in Mexico for the low-cost vehicle.
The new plan announced Tuesday, Musk said, “is not contingent on any new factory or massive new production line. It will be made on our current production line much more efficiently.”
Musk also brushed off a question on whether the new products now scheduled to launch in 2025 would be refreshed versions of current vehicles or provide any detail about them. “I think we’ve said all we will on that front,” Musk said.
Robotaxi future
Musk emphasized several times that Tesla’s future is mostly dependent on developing autonomous vehicle and a robotaxi service that would include Tesla-owned vehicles and vehicles loaned to the service from Tesla owners, who would receive payment.
“The way to think of Tesla is almost entirely in terms of solving autonomy and being able to turn on that autonomy for a gigantic [robotaxi] fleet,” he said. “In the future, gasoline cars that are not autonomous will be like riding a horse and using a flip phone.”
Ahead of the earnings report, Wall Street analysts were bracing for tough results after Tesla reported an 8.5% fall in first-quarter deliveries, its first sales decline since the second quarter of 2020.
Investor and analysts also worried about the automaker's direction and expected to hear from CEO Musk on the earnings call in hopes for some clarity.
Tesla said in January 2024 that a future low-cost vehicle would fuel a new growth wave, but a 5 April 2024 Reuters report said the vehicle program had been canceled, while robotaxi development continued. Analysts refer to the low-cost vehicle as the "Model 2," although Tesla has not given it a name.
"The moment of truth has now arrived for Elon Musk and Tesla," Wedbush said in a research note Friday, 19 April 2024, citing the battling narratives between the robotaxi and the low-cost vehicle. "If Tesla does not come out with a Model 2 in the next 12 to 18 months, the second growth wave will not come. Musk needs to recommit to the Model 2 strategy along with robotaxis."
In other developments, Tesla announced 16 April 2024 that it was cutting more than 10% of its global workforce to "prepare Tesla for our next phase of growth." It also announced the resignation of Andrew Baglino, senior vice president of powertrain and energy engineering.
Over the weekend, Tesla cut vehicle prices in major markets including the US, Europe and China. Tesla also cut the price of its advanced driver-assistance software, which it calls Full Self-Driving, by $4,000 to $8,000.
Musk announced in April 2024 that Tesla will hold a "robotaxi unveil" on 8 August 2024 after the Reuters report about canceling plans for a low-cost consumer EV priced around $25,000. Musk, who posts regularly on the X platform that he owns, called into question the report by saying the news agency was "lying," but he didn't point to any supposed inaccuracies.
Musk has said for years that developing self-driving vehicles — and the software to make current vehicles autonomous — would eventually generate more profits for Tesla than vehicle sales. "Not quite betting the company, but going balls to the wall for autonomy is a blindingly obvious move," he wrote on 16 April 2024 on X, responding to a Tesla fan account.