Elon Musk made sure not to disappoint investors on Tuesday, even if his company’s quarterly results did. Exuding confidence, the Tesla CEO turned on what some call his “war mode” and delivered a notable performance during the first-quarter earnings call, promising to accelerate the rollout of much-needed new models that would reignite its supercharged growth rates of yesteryear. .
“We have updated our future range of electric vehicles to accelerate the launch of new models before the aforementioned start of production, in the second half of 2025. So we expect it to be more like early 2025, if not later this year. ”he declared Musk.
With his $45 billion 2018 pay package hanging in the balance and shares falling to 52-week lows on Monday, the tech mogul needed to shore up waning confidence in the company’s failed stock story. tesla.
Reports that it had abandoned the $25,000 low-cost car already in full development in favor of a dedicated robo-taxi that Musk call now Cybercabwere considered so risky that the son of one of the tech leader’s most ardent investors, Ron Baron, called it a “thesis change.”
On Tuesday, the owner of tesla could realistically bridge the next few dry quarters until an entry model and robo-taxi can finally arrive.
His response was to reveal a seismic change in strategy that could prove fateful.
The $25,000 model, which he recently claimed was a “revolution in manufacturing,” would no longer incorporate “a level of production technology that is far ahead of any automobile plant on the planet.”
In a contradiction to his December comments, he said the new models (plural) would be built on existing assembly lines and would only “use aspects” of a new next-generation platform that was the focus in the Investor Day last March.
Thus, tesla could save billions of dollars in capital expenditures and bring one or more models to market before the promised second half of 2025, without depending on the start-up of a new factory in Mexico or anywhere else.
Musk He added: “We believe this should allow us to reach over 3 million vehicle capacity when fully realized.”
The downside is that the company recognized that the planned reduction in manufacturing costs by 50%, compared to the current platform of the Model 3/Ymight not materialize.
Meanwhile, only the dedicated model robo-taxi would continue with the so-called unboxed strategy that tesla He thinks it’s so revolutionary.
The veteran Morgan Stanley He later predicted that Model 2as the nameless low-cost entry car is often called, would now be transformed into essentially stripped versions of the aging Model 3 and Model Y “with improvements in software and AI/hardware capability.”
Daniel Ivesof Wedbush Securitiesbaptized it as the “Model 2.5″, a hybrid of new and old platforms.
The bears growled that the hasty change in strategy was just another sleight of hand to distract from a dismal first quarter in which revenue and profits fell short of expectations, and the company burned through $2.5 billion worth of reserves. dollars, the first cash leak of tesla since the beginning of the COVID-19 pandemic.
After all, the deadlines for the products of Musk they are meaningless. His preferred modus operandi is to announce very unrealistic goals that his team must strive to meet under enormous pressure and the imminent risk of losing their jobs.
Whether it is the Semi and the roadster -both presented more than six years ago- and their plans for robo-taxi for 2019 or the promised performance of the new generation of 4680 cells from tesla in it Battery Day 2020the mogul’s track record in meeting his self-imposed goals has been dismal lately.
Not even its expected star product, the Cybertruck, has managed to instill confidence. However, the polarizing businessman is not one to easily admit defeat.
This week, he recycled a video of Autonomy Day held almost exactly five years ago, in which he first laid out his vision of a driverless transport network of tesla that would compete with Uber and Lyft.
His lawyers argue that the broken promises do not constitute fraud compared to the scale of his ambitions, but simply represent a failure. Investors have generally turned a blind eye as long as no competitor has innovated more than tesla.
However, a torrent of bad news, such as persistent and repeated price cuts amid disappointing sales, has tarnished its reputation lately. Seems less willing to manage tesla and much more interested in fueling hot political issues, useful for attracting followers on his ailing social media platform, xbut discouraging for most electric vehicle customers.
Therefore, Ives, of wedbushsaid the company’s CEO had to show up this time in his big-boy pants and act like an adult after his recent streak of poor results, which only unsettled investors.
And so he did: Musk reaffirmed that volumes would grow in 2024, promised that demand in the second quarter would be better, predicted that it would sign its first driverless software licensing deal with at least one rival automaker before the end of the year, and even suggested that his optimus robot It could go on sale at the end of 2025.
tesla also stated that it had sufficient liquidity to fund its product roadmap and long-term capacity expansion plans, while maintaining a strong balance sheet during this period of uncertainty, dispelling any speculation that the Company may have to issue new shares or debt.
With bearish sentiment ahead of the results, his calm confidence dispelled pessimism for the moment.
Thanks to a mix of short covering and “sell on the rumor, buy on the fact,” the stock is expected to rise 13% at the open, adding $50 billion in value, or roughly the equivalent to ford either General Motors.
(C) 2024, Fortune
