In order to increase the stock price, Musk directly came to call back the carbine.
Not only will the cheaper models not be given up, but they will also be “accelerated”. The production plan originally scheduled for the second half of 2025 may be advanced to early 2025 or even the end of 2024.
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After Musk's words, the capital market was shocked, and the stock price soared, jumping 13% after the market closed that day.
Calculated based on the closing market value of the day (460.8 billion U.S. dollars), Tesla surged nearly 60 billion U.S. dollars (approximately 433.9 billion yuan) in one day.
This blockbuster news also made the market selectively deaf and didn't care at all that Tesla's financial report was lower than expected.
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In the first quarter of 2024, Tesla achieved revenue of US$21.301 billion, down 9% year-on-year; net profit was US$1.129 billion, down 55.07% year-on-year; delivery volume was 386,810 vehicles, down nearly 9% year-on-year. Various key data were lower than Wall Street analysts' expectations.
But in the eyes of many people, as long as Tesla continues to launch low-priced cars, even the less-than-pretty numbers in the financial report will begin to look forward to it.
01. Autonomous driving is the right way
“Even if I were abducted by aliens, Tesla would have to solve the autonomous driving problem.”
Musk's speech at the earnings call once again confirmed Tesla's original intention. In addition, the release of FSD price reduction, the release of Robotaxi, and the release of 85,000 NVIDIA H100 GPUs for training artificial intelligence also revealed Musk's plans for The obsession and determination of fully autonomous vehicles.
FSD will license a major car company
Musk said on the call that those who view Tesla as a traditional car manufacturer would be very wrong. Tesla is essentially an artificial intelligence company dedicated to injecting “intelligence” into every car. superior.
Tesla has also made new progress in FSD (fully autonomous driving) external authorization, saying that it is discussing cooperation with a large car company on Robotaxi, but for specific information, Musk said that it will have to wait until August 8. Robotaxi press conference.
In Musk's grand plan, electric vehicles must be self-driving. In his view, driving a traditional fuel vehicle will be as outdated as riding a horse and using a flip phone.
Musk and other Tesla executives also mentioned that the company will focus more on the research and development of autonomous driving technology, and its long-term goal is to put 5 million to 7 million autonomous vehicles on the road. Tesla has a series of models that can provide valuable performance predictions for FSD in future iterations, and several states in the United States have begun to accept autonomous vehicles.
In addition, the design work of Tesla’s fifth-generation autonomous driving chip Hardware 5 hardware has been basically completed and is expected to be installed in cars by the end of 2025.
Chris Redl, an automotive analyst at Siena Capital, estimates that Tesla received as much as $700 million in deferred revenue from FSD in the first quarter of this year, which is approximately equivalent to 4.3% of Tesla's automotive revenue after removing regulatory credits. According to the financial report, FSD not only increased bicycle sales revenue, but also increased bicycle gross profit margins.
Although it still cannot equal the tens of billions of dollars Tesla spent on autonomous research and development this year, it at least sees money coming back.
Speeding up the launch of affordable models
I really can’t blame Musk for always criticizing Reuters as a “big liar.”
At the just past financial report meeting, Musk made it clear that new affordable models will be launched normally or even accelerated.
“We have updated our product line of future vehicles, and we will accelerate the launch of new models, including cheaper models, before the previously mentioned production date of the second half of 2025.” New models may be brought forward to early 2025 or even 2024 Debuts at the end of the year.
In early April, foreign media reported that Tesla executives canceled the development plan for the low-cost model “Model 2” without telling employees and suppliers in February, and instead developed a new Robotaxi model. At that time, Musk immediately posted on the social network X refuted the rumor and called it fake news.
This time Musk’s clear spoiler about the new model is also a counterattack against previous media revelations.
Robotaxi cannot be left behind either
In addition to full-scale All in autonomous driving, Musk spent more time describing the future of Tesla's Robotaxi network.
At the financial report meeting, Musk confirmed that Tesla will release a driverless taxi (Robotaxi) on August 8, 2024.
As early as 2016, Musk said that the number of driverless vehicles will exceed the number of human-driven vehicles in the future. If Tesla cannot achieve full self-driving, its “value is essentially zero.”
In the same year, the concept of Tesla’s self-driving taxi (Robotaxi) was proposed. In Musk's biography published in September last year, Musk revealed that Robotaxi will be built on Tesla's new platform and will be equipped with a steering wheel and pedals.
According to the statement at the financial report meeting, Tesla Robotaxi has completed the engineering design and will have large-scale mass production capabilities after launch.
Tesla also said that Robotaxi will still use a new “out of the box” process, Tesla will be responsible for operating the fleet, and Tesla's robotaxi fleet will integrate the business models of Airbnb and Uber.
Musk even used Airbnb as an analogy, saying that car owners who join Tesla's Robotaxi network can decide when to use the car themselves or when to join the car in the autonomous driving network to make money.
One more thing
In addition to this financial report meeting, Tesla also brought a surprise to the country that day.
In the early morning of April 24th, Beijing time, Tesla secretly launched its new Model 3 Performance (high-performance version) of its compact sedan and began accepting pre-orders simultaneously.
Compared with the old P version, the appearance and performance of the new car have been adjusted. For example, a new front lip and rear spoiler have been added, reducing wind resistance by 5%, reducing lift by 36%, and improving front and rear lift balance by 55%. The new high-performance version is also equipped with larger brake calipers.
The performance has also been greatly improved. It is equipped with Tesla's new fourth-generation drive unit, which has a continuous power increase of 22%, a peak power increase of 32%, a peak torque increase of 16%, and a cruising range of 296 miles (approximately 476 kilometers). Musk also claimed that this car can drive faster than a Porsche 911.
Tesla's official website shows that the new Model 3 high-performance version is priced at US$52,990 (approximately 383,900 yuan), and the delivery time for orders in North America is expected to be from May to June this year.
However, it is worth mentioning that although in terms of pricing, the high-performance version of Model 3 is more than $5,000 higher than the long-range version, according to the current US electric vehicle subsidy policy, since the high-performance version can get up to $7,500 There is a car purchase tax credit, so the new model is $2,000 cheaper.
Perhaps Musk himself has not discovered this hidden benefit, and joked with netizens that the preferential policy for electric vehicles in the United States applies to leasing, and the price of leasing a long-range Model 3 is still lower than that of the high-performance version.
02. The biggest decline and performance lower than expected
Now let's review Tesla's performance in the first quarter of 2024.
Total revenue in the first quarter was US$21.3 billion, slightly lower than the previous market expectation of US$22.3 billion, down 9% from US$23.329 billion in the same period last year, and down more than 15% from US$25.17 billion in the fourth quarter of last year; both It was the first year-on-year decline in the past four years and the largest decline since 2012.
Due to Tesla's continued price reduction strategy and the squeeze from comprehensive All in AI initiatives, net profit was directly cut in half on the profit side. Tesla's net profit in the first fiscal quarter was US$1.1 billion, a year-on-year decrease of 55%. The market's original expectation was US$1.81 billion.
Adjusted shareholder earnings in the first quarter were US$0.45, which was also lower than analysts' expectations of US$0.52. It fell from US$0.71 in the previous quarter and US$0.85 in the same period last year, both quarter-on-quarter and year-on-year. Operating profit margin further dropped to 5.5% from 8.2% in the fourth quarter of last year, setting a new low.
Of course, the decline in profits is also related to spending more money. Tesla's capital expenditures increased to US$2.77 billion in the first quarter, a year-on-year increase of 34%. Cash flow in the first quarter was negative $2.5 billion, and cash and equivalents and investments decreased by $2.2 billion at the end of the quarter.
However, judging from the information disclosed in the financial report, Tesla’s investment mission still prioritizes autonomous driving technology. Tesla’s investment in AI infrastructure in the first quarter reached US$1 billion.
In the past few months, Tesla's computing power has increased exponentially, which has laid the foundation for FSD to be updated and upgraded every two weeks.
In the first quarter of this year, Tesla's total car production was 430,000 vehicles, and Tesla's global delivery volume was 386,800 vehicles, which was significantly lower than the previous agency forecast of about 430,000 vehicles, down 8.3% year-on-year, and down 20.1% month-on-month. %. At the same time, this is also the first time since 2020 that Tesla's delivery volume has declined year-on-year, and it is also the worst single-quarter sales performance since 2022.
Musk said many other automakers are reducing their investment in EVs and instead turning to plug-in hybrids. In other words, the decline in demand for electric cars is also one of the main reasons for the decline in sales. However, Musk believes this is the wrong strategy and that electric vehicles will eventually dominate the market.
The decline in sales also directly affected Tesla's automotive business revenue, which fell 13% year-on-year to $17.34 billion.
However, it is worth mentioning that revenue from the energy production and storage segment increased 7% year-on-year to $1.64 billion. Services and other business receivables were US$2.288 billion, a year-on-year increase of 25%.
Under the circumstances, even with the successive price cuts of Tesla models, Tesla's overall gross profit margin still remained at 17.4%, which was basically the same as the previous quarter. However, this data exceeded analysts' expectations. 16.5%.
However, Tesla reiterated its pessimistic outlook for 2024, saying it is “currently in a (platform) period between two major growth waves” and made it clear that although it is accelerating the launch of new models, the sales growth rate in 2024 is expected to remain the same. It will be “significantly lower” than in 2023.
Since it won't work in 2024, it all depends on how low-priced cars perform next year.