After delivering a financial report that fell short of market expectations, Tesla's post market stock price actually surged by over 13%.
On April 24th, Tesla released its first quarter 2024 financial report, which showed that it achieved a revenue of $21.301 billion in the first quarter, a year-on-year decrease of 9%; The net profit was 1.129 billion US dollars, a year-on-year decrease of 55%; Adjusted earnings per share are $0.45, with a gross profit margin of 17.4%. Except for gross profit margin, all financial indicators were lower than Wall Street's expectations.
However, Tesla has presented a new business landscape: Tesla's low-priced models will be released no later than next year, Robotaxi (autonomous taxi) will be released in August this year, the prospect of fully implementing autonomous driving is clear, and it will even be ordered by other car companies. The progress of artificial intelligence is stable.
This outlook has once again gained market recognition for Tesla, with its US stock price soaring by 13.38% after market hours. Meanwhile, Ark Investment Management, a subsidiary of "Sister Wood," has also increased its holdings in Tesla for several consecutive days.
Tesla stated that it is currently in between two major growth waves: the first wave began with the global expansion of the Model 3/Y platform. "We believe that the next wave will be triggered by advances in autonomous driving technology and the launch of new products, including those based on our next-generation vehicle platform."
Low priced models returning to Tesla?
During the earnings conference call, Tesla CEO Elon Musk gave a heavyweight boost - Tesla's low-priced models can start production as early as the end of this year or as late as early next year. It was the release of this news that drove Tesla's post market stock price up rapidly.
Musk acknowledges that demand for electric vehicles is under pressure, and other car manufacturers are shifting towards hybrid vehicles, but Tesla will not do so.
He pointed out that Tesla will continue to update its vehicle lineup, accelerate the launch of new models, and some production plans originally scheduled for the second half of 2025 may be advanced to early 2025 or even the end of 2024, including cheaper models that will form a strong combination with existing models. The new model will utilize the next generation platform and current platform technology, and will be able to use the production line of the current model. He also stated that the delivery volume of electric vehicles in 2024 will be higher than last year.
In the previous weeks, foreign media reported that Tesla would abandon its plan to launch low-cost cars and instead focus on developing the autonomous taxi Robotaxi. This low-cost model has always been highly anticipated by the market, with an expected price of around $25000, and is expected to become the next popular model driving Tesla's growth.
Subsequently, Musk denied the report in an article on his social media platform X, stating that he was "lying again.". However, Musk's debunking did not reverse Tesla's decline. However, there have been constant reports from the media that Tesla has abandoned low-priced models. Under the huge bearish news, Tesla's stock price fell for several days before the release of the financial report, with a drop of over 40% since 2024.
During the earnings conference call, an analyst asked detailed questions about this low-priced model, but Musk did not provide a response. Tesla executives have stated that they are updating their future product roadmap to provide customers with cheaper electric vehicles more quickly.
However, some analysts have also raised doubts about this. In its financial report, Tesla described this low-priced model as a "lower priced model," and analysts believe that the price of this new model may not match market expectations.
Previously, Tesla disclosed that compared to existing platforms that support Model 3 and Model Y, the cost of the next-generation electric vehicle platform may be reduced by 50%. At the financial report conference call, Tesla acknowledged that the company will shift towards a strategy of mixing next-generation technology and processes with existing platforms and production lines, which will lead to a reduction in cost compression for the company.
Foreign media quoted analysts as commenting that this can be seen as confirmation that the Model 2 (low-priced model code) program has been discontinued.
The commercialization of autonomous driving is just one step away
"Even if aliens kidnap me tomorrow, Tesla will still solve the problem of autonomous driving." During the earnings call, Musk made it clear that he was determined to pursue autonomous driving.
Musk emphasized, "If anyone wants to invest in Tesla stocks, I strongly recommend that you try FSD. If you don't know FSD, it's difficult to say you know Tesla."
Based on a large-scale driving range, self-developed computing platform, and huge computing power layout, Tesla's intelligent driving software FSD (fully autonomous driving) has entered the V12.3 stage. Tesla stated that fully autonomous driving is only "one step away" from reality, and once its large-scale commercial operation is implemented, it will become Tesla's profitable "cash cow".
In the FSDV 12.3.1 version released by Tesla to North American car owners in March, Tesla has introduced "end-to-end neural network" technology, which uses deep learning of over a million driving data and artificial intelligence technology to influence vehicle control, such as operating steering wheel pedals, turn signals, etc., instead of hard coding every driving behavior.
Musk once said that 6 billion miles is an important node for the complete auto drive system to achieve qualitative change. In the first quarter of 2024, Tesla FSD's total actual road mileage reached 1.25 billion miles (approximately 2 billion kilometers), far exceeding the sum of other companies. Tesla expects that at current speeds, the cumulative mileage of FSD is expected to reach 2 billion miles by the end of May and a total of 6 billion miles within a year.
In early April, Musk also announced on his social media platform X that Tesla's FSD driving mileage would soon exceed 10 billion miles.
In order to further expand the coverage of FSD, Tesla recently announced a reduction in monthly subscription and package purchase prices for FSD in the United States. The FSD subscription price has decreased from $199 per month to $99 per month; The purchase price of the FSD package has also decreased from $12000 to $8000.
"We are indeed moving towards the future of electric vehicle autonomous driving, where gasoline cars will be like riding horses and using flip phones," Musk said.
It is worth mentioning that Musk also confirmed that Tesla is discussing FSD licensing with an automobile manufacturer, and "we are in dialogue with an automobile manufacturer.".
Tesla plans to supply its autonomous driving onboard computers and cameras to other car companies and authorize their use of software. However, Tesla management also mentioned that even if a licensing agreement is reached this year, Tesla may still need three more years to adapt and install it in the car.
In fact, as early as 2021, Musk had stated that he had early discussions with other car manufacturers regarding the licensing of autonomous driving technology, but had not achieved any results. In 2023, Tesla announced that it will open up authorization for the Autopilot and FSD assisted driving systems to other car manufacturers. However, earlier this year, Musk also mentioned that "car manufacturers do not believe that Tesla's fully autonomous driving is real.".
Based on the increasingly mature FSD, Tesla Robotaxi (Autonomous Taxi) is already in sight.
Musk confirmed during the earnings conference call that Tesla will release the Robotaxi on August 8, 2024, and management has released the latest progress on Robotaxi. Robotaxi will adopt an unboxed manufacturing method.
Musk also revealed that Tesla Robotaxi is called "Cybercab", a vehicle customized for taxi services. As part of the fleet, Tesla owners may also send their cars out to make money. Musk described it as a "combination of Airbnb and Uber.".
Tesla is currently developing future available ride hailing features and plans to seamlessly integrate them into Tesla applications. After the financial report conference call, Tesla released a preview screen on X for automatic car hailing through the Tesla app.
Preview screen of Tesla APP's automatic car hailing
Founder of Ark Investment, Casey Wood, stated in a recent interview that Tesla is carrying out the world's largest artificial intelligence project through autonomous driving. Wood believes that the gross profit margin of Robotaxi business is between 80% and 85%, which is like software as a service. By 2030, the entire ecosystem of autonomous taxi driving will generate $8 trillion to $10 trillion in revenue, and platform suppliers such as Tesla will receive half of that revenue.
Musk reiterated that Tesla is an artificial intelligence company
Tesla is fully increasing its investment in the field of artificial intelligence, including the aforementioned autonomous driving.
Tesla stated that in order to further improve its end-to-end training capabilities, it will continue to enhance its core artificial intelligence infrastructure capabilities in the coming months.
In early 2024, Musk confirmed on social media that Tesla will invest $500 million in the New York Superfactory to build a Dojo supercomputer cluster. He also pointed out that the investment amount to maintain competitiveness in the AI field will be billions of dollars per year. In early April, Musk further pointed out that Tesla's cumulative investment in the field of autonomous driving (computing power training, large-scale data pipelines, and video storage) will exceed $10 billion in 2024.
Musk stated that by the end of this year, Tesla will have 85000 Nvidia H100 GPUs for training artificial intelligence.
He emphasized that Tesla is an artificial intelligence company, and Musk downplays or even refuses to answer analyst questions about the automotive business. In his view, treating Tesla as an investor in a car company is not qualified.
In addition, Musk also revealed the progress of the humanoid robot Optimus, which is currently capable of performing simple operations, such as "completing simple factory tasks in the laboratory." Tesla will attempt preliminary production of Optimus this year for internal use.
He added that humanoid robots may begin limited mass production by the end of next year and be supplied to external customers. Musk emphasized that Optimus will be more valuable than any other product combined, and Tesla's artificial intelligence reasoning technology is also very different from any other company.
Musk has repeatedly stated that sales of humanoid robots may make a greater contribution to Tesla's business compared to other fields such as automotive manufacturing.
Analysts point out that despite Musk's outlook on other businesses, the market still places greater emphasis on the progress of Tesla's automotive business, just as low-priced models have significantly boosted stock prices.
In order to increase market share, Tesla has lowered the prices of its entire range of products in markets such as the United States, China, and Europe by approximately $2000.
However, some foreign media have pointed out that currently, Tesla is still one of the few car manufacturers worldwide who make money from electric vehicles. However, in China, the world's largest electric vehicle market, Tesla's momentum is being taken away by newcomers such as Xiaomi; In the US market, established car manufacturers are also catching up, and General Motors has announced that it has overcome obstacles in battery pack manufacturing and is expected to sell electric vehicles and achieve profitability later this year.
Tesla has been stating for many years that it expects an average annual growth rate of 50%, but has yet to achieve this goal. The financial report also warns investors that this year's growth rate will "significantly decrease".
"From 2019 to now, we have just experienced a long period of prosperity," Musk said in a conference call. "Now is the time to restructure the company to achieve the next stage of growth."
