As Tesla prepares to announce what will likely happen unimpressive financial results On Tuesday, for the first quarter, the company is taking new steps to go “to the wall for autonomy,” as CEO Elon Musk said last week in a post on.
Over the weekend, Tesla dropped the price of its Full Self-Driving (FSD) advanced driver assistance system to $8,000, down from $12,000. This price drop is in addition to last week’s price drop $99 FSD Monthly Subscription, starting at $199. The push to introduce FSD into more cars could be an attempt to collect more data as Tesla works to strengthen the neural networks that will enable autonomy on a larger scale. Today, FSD can perform many city and highway driving tasks, but still requires a human to remain vigilant with hands on the wheel in case the system requires a takeover.
Tesla faces shrinking profits as it banks on self-driving technology. Last week, Tesla laid off 10% of its staff in an effort to reduce costs in preparation for the company’s “next phase of growth,” according to an email Musk sent to all employees.
Earlier this month, Musk abruptly announced on X that Tesla was suspending development of its $25,000 electric vehicle. in favor of a robotaxi which he promised to reveal in August. Sources within Tesla confirmed to TechCrunch that they had not been notified by Musk about the sudden change and that the internal restructuring reflects a new philosophy that puts robo-taxi development at the forefront.
All of this is happening as Tesla zigzags in its electric vehicle pricing strategy.
Last week, Tesla abandoned EV stock price discounts, but over the weekend, Model 3 and Model Y prices were reduced by up to $2,000 in the United States, China and Germany. As we saw during first quarter 2023these price drops have harmful consequences on Tesla’s revenues and margins.
Tesla is expected to report results after the market closes on April 23. Musk has previously said that without autonomy, Tesla is “basically worthless.”
Tomorrow, the company will have to convince investors of its priority shift towards autonomous vehicles. This is a glimmer of hope in the cloud of declining margins, rather than mere smoke and mirrors.
Since Musk laid off staff and announced that Tesla would do everything possible to improve its autonomy, Tesla’s stock price has fallen almost 10%. Shares have fallen more than 42% since the start of the year.
What to expect from Tesla’s first quarter 2024 results
Tesla’s lower first-quarter delivery numbers, combined with price cuts, are the ingredients for reduced profits. And analysts seem to agree.
Analysts polled by Yahoo Finance expect earnings of $0.48 per share on revenue of $20.94 billion. As a reminder, Tesla generated $25.17 billion in revenue in the fourth quarter and $23.3 billion in the first quarter of 2023.
You’re here delivered 386,810 vehicles in the first quarter of 2024, down 20% from the 484,507 delivered in the last quarter of 2023. It should be noted that this is not just a quarterly incident. Tesla delivered fewer cars than in the first quarter of 2023 – the first year-over-year sales decline in three years.
Tesla’s fourth-quarter results showed a company already struggling with shrinking profit margins due to its price-cutting strategy, rising costs to launch production of its Cybertruck and other R&D expenses.
The automaker reported net income, on a GAAP basis, of $7.9 billion in the fourth quarter – a sky-high figure driven by a one-time non-cash tax benefit of $5.9 billion. The company’s operating income and profit on an adjusted basis provided a clearer picture of its financial performance.
Tesla reported fourth-quarter operating profit of $2.06 billion, down 47% from the same period last year. On an adjusted basis, the company earned $3.9 billion, down 27% from the same period last year.
The question is whether Tesla can prevent the profits pie from turning into a profits muffin.
Since Tesla released its production and delivery numbers for the first quarter of 2024, the company has continued to use various financial levers aimed at attracting new buyers and incentivizing existing customers to pay for FSD, while reducing costs and maintaining profit margins.
These opposing goals, coupled with Musk’s “wartime CEO” status, are bound to make the Q1 earnings call entertaining. Beyond this potential theater, pressing long-term questions arise about how Tesla achieves autonomy and whether that will be enough to convince investors that it can still lead and innovate.
techcrunch
