In the run-up to Tesla’s earnings report this week, analysts expected bad news because sales were down in the first quarter and CEO Elon Musk appeared more committed to autonomous robotaxis than making affordable electric vehicles for human drivers.
The bad news arrived as expected, with lower quarterly profit and revenue, but it was balanced by Tesla’s announcement that it would make the lower-priced vehicles and accelerate the start of production. Musk said output could begin in early 2025 or perhaps even by the end of this year.
There was also optimism for Tesla’s Optimus robot but less so for its in-house 4680 battery cells.
Here are some of the takeaways from the earnings report and a conference call led by Musk.
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Tesla said first-quarter net income fell 55 percent to $1.1 billion while revenue dropped 9 percent to $21.3 billion. Deliveries, which Tesla reported in early April, fell 8.5 percent globally to 386,810. Tesla said there were factors out of its control that contributed to the negative results, including the Red Sea conflict, the arson attack at Gigafactory Berlin and the gradual ramp-up of the updated Model 3 at its Fremont, Calif., plant.
“Global EV sales continue to be under pressure as many carmakers prioritize hybrids over EVs,” the automaker said in its report. “To support our growth, we have been increasing awareness and expanding vehicle financing programs, including attractive leasing terms for our customers.”
Musk has gone back and forth on the need for a Tesla priced around $25,000. During the automaker’s 2020 Battery Day event, Musk committed to a vehicle at that price point. But in 2022, he downplayed the low-cost car and promised to produce a robotaxi without human controls by 2024.
Reuters reported in early April that the affordable Tesla, informally called the Model 2, had been canceled but that plans for the robotaxi survived.
The good news for Tesla fans is that on the call, Musk committed to the human-driven models by next year.
“Model launch concerns, particularly pertaining to the low-cost platform, were mitigated with Tesla’s decision to pull forward the launch schedule,” Bank of America said in a research note.
Tesla promised big battery breakthroughs with its in-house 4680 battery cells over the smaller 2170 cells it buys from suppliers. At the 2020 Battery Day, the company said the 4680 eventually would offer a more than 50 percent gain in EV range while halving the cost of production.
But this week, Musk downplayed the importance of the 4680, now used in the Tesla Cybertruck. “You know, we’re making good progress, but I don’t think it’s super important for us, at least in the near term,” he said on the earnings call. The 4680 will be competitive with supplier cells by the end of this year, he added.
The executive leading the 4680 program resigned a week before the earnings release. Andrew Baglino, senior vice president of powertrain and energy, had been at Tesla for 18 years.
Tesla announced that it was developing a humanoid robot at its AI Day event in 2021 and has since given updates showing its creation walking and folding clothes. Musk has said the robot could one day replace humans in jobs at factories and in the home.
On the earnings call, Musk said Optimus could go on sale next year. “I think Optimus will be more valuable than everything else combined. Because if you’ve got a sentient humanoid robot that is able to navigate reality and do tasks at request, there is no meaningful limit to the size of the economy,” he said.
Tesla’s update on its Full Self-Driving software was a mixed bag. Musk has been promising for years that Tesla vehicles would one day receive a software update that would make them autonomous. That hasn’t happened, even as the software has improved and is now on version 12.
Musk said this week that autonomy remains the key to Tesla’s future and that significant progress is being made in real time. In the near future, Tesla will run a robotaxi service using its own cars and those from Tesla owners, who will receive payment for loaning their vehicles to the fleet, he said.
“The way to think of Tesla is almost entirely in terms of solving autonomy,” Musk said on the call.
Source: autonews.com