Revenue fell by 13%, gross profit fell by 18%, net profit fell by 55%, and cash flow was negative…
Tesla’s operating disastrous performance in the first quarter of this year was disclosed in the financial report.
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But Musk remains optimistic, not only promising that the second quarter will get better, but also revealing a lot of future business progress.
For example, Tesla RoboTaxi will be launched this year; new models, and not just cheaper models, will be put into production as soon as the end of this year; HW 5.0 will be on the road at the end of next year; and the humanoid robot Optimus will also be sold next year .
After the financial report was released, Tesla's stock price rose 13.33% after the market closed.
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Tesla misses first-quarter expectations
Tesla’s main business in the first quarter of this year had almost no good financial performance.
Core deliveries fell below 400,000 vehicles. A total of 386,800 vehicles were delivered in the first quarter, down 8.5% year-on-year and 20.2% month-on-month. This was the first decline in delivery volume in the past two years since the second quarter of 2022, with almost 4,250 vehicles delivered a day.
This resulted in a sharp decline in automobile sales revenue, which in the first quarter was US$17.478 billion (approximately 126.64 billion yuan), a year-on-year decrease of 13% and a month-on-month decrease of 19.4%.
At the same time, total revenue is also decreasing. Tesla's total revenue in the first quarter was US$21.301 billion (approximately 154.34 billion yuan), a year-on-year decrease of 9% and a month-on-month decrease of 15.4%. It fell short of Wall Street’s expectations of US$22.22 billion (approximately 161 billion yuan).
Moreover, Tesla not only has less revenue, but its earning power has plummeted.
Operating profit in the first quarter was US$1.171 billion (approximately 8.48 billion yuan), a year-on-year decrease of 56% and a month-on-month decrease of 43.3%.
Gross profit fell below US$4 billion. Gross profit in the first quarter was US$3.696 billion (approximately 26.78 billion yuan), a year-on-year decrease of 18.1% and a month-on-month decrease of 16.7%, which was the lowest level in two years.
Gross profit margin continued to decline, reaching 17.4% in the first quarter, a decrease of 0.2 percentage points from the previous quarter.
More importantly, Tesla's net profit in the first quarter was only US$1.129 billion (approximately 8.18 billion yuan), a 55% year-on-year drop and a 602% month-on-month drop, the lowest level since the second quarter of 2021.
Moreover, free cash flow in the first quarter was negative, at -US$2.531 billion (approximately -18.34 billion yuan), a year-on-year decrease of 674% and a month-on-month decrease of 222.6%.
Cash reserves decreased slightly. As of the end of the first quarter, Tesla's cash and cash equivalents on its books were US$26.863 billion (approximately 194.64 billion yuan), a year-on-year increase of 20% and a month-on-month decrease of 7.7%.
However, even after releasing such an unsatisfactory financial report, Tesla's stock price began to rise after the market closed, with a maximum increase of 13.33%, which was the first increase since the stock price fell continuously on April 11.
The biggest reason for the rise is that Musk mentioned detailed future plans at the financial report meeting, showing all his cards at once.
Tesla’s future plans
According to the information disclosed by Musk, Tesla’s future plans can be divided into three categories:New models, new hardware, and Optimus the robot.
As we all know, Tesla has long planned to launch new cheaper models and RoboTaxi. Some time ago, there was news that Tesla was canceling plans to launch cheaper models.
However, this news has been falsified by Musk. And in the financial report released this time, Tesla officials further clarified that the plan has not been canceled, but has only been adjusted.
Tesla’s new passenger car models include not only lower-cost new models. The original planned production schedule of the second half of 2025 has been advanced, and Tesla will accelerate the launch of new models.
Moreover, these new models will combine the next-generation platform and the technology of existing platforms. They can be produced on Tesla's existing production lines without opening new production lines.
At the same time, Tesla's RoboTaxi will also be launched later this year. Musk calls Tesla RoboTaxi “Cybercab” and will be equipped with hardware designed for autonomous driving.
After the launch of Cybercab, Tesla will form its own self-driving taxi fleet, operating in a manner similar to Airbnb and Uber, and the taxi service will most likely be integrated into the Tesla App. The financial report also showed a rough rendering.
However, the new RoboTaxi will use a new production line, which is the “unboxed” production line demonstrated at last year's Investor Day.
And, HardWare 5.0 is coming. Musk said that HW 5.0 has completed the basic design and should be on the market by the end of next year. It was previously reported that HW 5.0 will use a 4nm process, support L5 level fully autonomous driving, and will be manufactured by Samsung.
As for FSD, the company has developed some models for internal use only to predict and test the functions of future FSD. The company's strategic focus is also moving towards the realization of autonomous driving technology.
Musk pointed out that Tesla will solve the problem of autonomous driving no matter what. And Tesla’s goal is to produce 5 million to 7 million cars capable of autonomous driving.
The company has also contacted a large car company about its current FSD system and has the opportunity to deploy FSD into the company's models.
In addition, Tesla’s humanoid robot Optimus is making rapid progress and is now able to perform simple tasks. Tesla will try initial production this year, first for internal use within the company, such as laboratories and factories.
Musk also said that Optimus may be available for sale by the end of next year. Although production is limited, “Optimus will be worth more than everything else combined.”
New cars, RoboTaxi, self-driving technology, humanoid robots… Although Tesla is often compared with various car companies, its business lines are not limited to cars, but are more like an artificial intelligence company.
Moreover, Tesla's service and energy storage businesses are also booming, and revenue is increasing step by step. The energy storage business is even more profitable, with a profit margin of 24.6% in the first quarter.
Musk pointed out that Tesla has experienced a long period of prosperity starting in 2019, and now is the time to restructure the company to achieve the next stage of growth.
Tesla executives also said that Tesla’s major layoffs some time ago were optimization in preparation for growth. “Any growing tree needs to be pruned, and this is pruning.”
Musk and executives are confident that the poor performance in the first quarter was only affected by seasonality and macro and microeconomic factors, but that the second quarter will be better.
And Musk emphasized that Tesla will not give up on anything important. Sales this year will be higher than last year, and “the future will be very bright.”
One More Thing
During the conference call, some analysts mentioned that Tesla's competitors in China may copy Tesla's cars and asked Musk for his opinion.
Musk’s reply was that Tesla is still competitive in China, “but I don’t know what Tesla’s competitors in China can do.”
So what can Chinese car companies do?