Tesla CEO Elon Musk is pictured during a visit to the company’s electric car factory in Gruenheide, near Berlin, eastern Germany, March 13, 2024, as employees have returned to work after production was halted due to a suspected arson that caused a power outage. .
Strange Andersen | AFP | Getty Images
By almost every measure, You’re here The first quarter earnings report released Tuesday was dismal. The company missed estimates on both the top and bottom lines. Revenue fell 9% year over year, the worst decline since 2012. Auto sales fell 13% compared to the same period in 2023. Free cash flow turned negative.
But CEO Elon Musk downplayed most of that and suggested investors focus their attention elsewhere.
Rather than dwelling on quarterly financial results or the massive restructuring announced last week, Musk reiterated his vision of Tesla as a company that creates artificial intelligence software to transform existing cars into autonomous vehicles, robotaxis dedicated vehicles that will make money for their owners and in driverless vehicles. transport network.
This is the Tesla that Musk is selling to Wall Street, and he’s telling anyone who has doubts to stay away.
“If someone doesn’t believe Tesla is going to solve the autonomy problem, I think they shouldn’t invest in the company,” Musk said during the earnings conference call. He added: “We will, and we do.”
Tesla shares rose 13% in extended trading Tuesday following the earnings release, despite disappointing results. Part of this optimism had to do with Tesla’s announced plans to start production of new affordable electric vehicle models “in early 2025, or even the end of this year.”
The stock’s rally accelerated during the earnings call as Musk looked to the future. He casually mentioned that the company’s robotaxi, whose arrival he has long announced, will be called CyberCab. In a shareholder presentation that Tesla released ahead of the call, the company provided an “overview of ridesharing in the Tesla app.”
Musk also talked about a driverless network that looks like Uber with Tesla autonomous vehicles.
“When the car is not moving,” Musk said, “it is possible to do distributed inference,” through the hardware in the cars.
Musk has been making these kinds of statements for years.
In 2015, Musk told shareholders that Tesla cars would achieve “full autonomy” within three years. They did not do it. In 2016, Musk said a Tesla car would be able to drive across the country without requiring any human intervention by the end of 2017. That didn’t happen either.
And in 2019, during a call with institutional investors who would help him raise more than $2 billion, Musk said Tesla would have 1 million vehicles ready for robot taxis on the road in 2020, capable of ‘do 100 hours of driving per week each, which would make money for their owners.
Robotaxis would make Tesla a $500 billion company, he said at the time. Tesla’s market capitalization now sits around that mark and has even surpassed $1 trillion in 2021, but the company has never been able to deliver on its driverless promises.
NBC News recently reported that the company has not even applied for permits to test and operate robotaxis in three states, including California and Nevada, where it employs thousands of people.
Separately, the California Department of Motor Vehicles filed a complaint against Tesla, claiming it engaged in false advertising and marketing regarding its driver assistance systems – the Autopilot and steering systems fully autonomous (FSD). Autopilot is standard, and FSD costs $99 per month or $8,000 up front. Both require human drivers at the wheel, ready to steer or brake at a moment’s notice. Tesla is defending itself in court against these accusations.
“More precious than everything else”
During the earnings call, Musk said he believes FSD will soon be ready to expand geographically into China pending regulatory approval. He did not mention the lawsuit filed by the California regulator.
Musk said people who haven’t tried Tesla’s latest FSD updates “really don’t understand what’s going on.”
His bluster isn’t limited to cars.
At an AI Day in August 2021, Musk said Tesla would build a humanoid robot, now known as Optimus. The company didn’t have a hardware prototype to show at the time, so an actor dressed in a spandex bodysuit danced on stage in its place. In 2022, Tesla unveiled its Optimus hardware prototype.
On Tuesday, Musk said Optimus was already capable of performing some unspecified factory tasks.
A mock-up of Tesla Inc.’s Optimus humanoid robot on display during the Seoul Mobility Expo in Goyang, South Korea, Thursday, March 30, 2023. The auto show will continue until April 9. Photographer: SeongJoon Cho/Bloomberg via Getty Images
Bloomberg | Bloomberg | Getty Images
“We might be able to sell it outside by the end of next year,” he said. “Optimus will be more valuable than everything else combined, because if you have a sentient humanoid robot that can navigate reality and perform tasks on demand, there is no significant limit to the size of the economy.”
Many investors and analysts are wondering whether all these ambitious and capital-intensive projects belong to Tesla.
Musk owns a 20.5% stake in Tesla, over 715 million shares, as of March 31, depending on the company recent filing of proxy. He used approximately 238.4 million of these shares as collateral to secure his personal debts. In January, he began seeking even more control of Tesla.
“I’m not comfortable making Tesla a leader in AI and robotics without having about 25% voting control,” he said. wrote in an article on
Musk created a new startup, xAI, to develop AI products that could rival those of Microsoft-OpenAI supported. Before starting xAI, he was already CEO of Tesla and SpaceX, and head of technology at X, which he owns. He is also the founder of brain-computer interface company Neuralink and tunneling company The Boring Co.
Alex Potter, an analyst at Piper Sandler, asked Musk during the earnings conference call if he would “find a mechanism” to ensure he would have the required level of voting control at Tesla because, otherwise, “the central part of the thesis could be in danger.
“Anyway, even if I get kidnapped by aliens tomorrow, Tesla will solve the autonomy, maybe a little slower, but it would at least solve the autonomy of the vehicles,” Musk said. “I don’t know if it would win over Optimus or over future products, but there is enough momentum for Tesla to solve autonomy, even if I disappear, for vehicles.”
But he was quick to tell investors that the company needed him to achieve its highest goals.
“If we have a super sentient humanoid robot that can follow you inside and you can’t escape from, we’re talking about a Terminator level risk, yes, I would be uncomfortable if it didn’t “There wasn’t a significant level of influence on how it was deployed,” he said.
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