The electric car manufacturer Tesla opened its books on Wednesday after trading closed on the US stock exchanges and presented its balance sheet for the past quarter.
Tesla’s rapid growth is slowing down – and company boss Elon Musk can no longer inspire investors with dreams of the future. In the last quarter, the electric car manufacturer missed Wall Street’s expectations; there is no sales target for this year – but there is an admission that deliveries will grow noticeably more slowly. However, Musk painted a rosy picture for the future: Tesla is only between two waves of growth, is developing a “revolutionary” production system and could become the most valuable company in the world.
Analyst Gene Munster from asset manager Deepwater summarized the mood on the TV channel CNBC: “It is the most sobering outlook from Tesla that I have seen so far.”
The new production process is intended, among other things, to build a cheaper compact model. According to current plans, production should begin in Austin, Texas, in the second half of 2025, Musk said. At the same time, he qualified: “I am often optimistic about time.” Austin was chosen because the engineers “have to live on the production line” during the launch, Musk said.
Tesla’s answer to overwhelming competition from China
The cheaper model is of strategic importance for Tesla because competition from Chinese manufacturers is increasing. In the last quarter, the manufacturer BYD sold more electric cars than Tesla. For the whole of 2023, Tesla was still ahead with 1.81 million vehicles – but it is foreseeable that BYD will become number one.
Chinese automakers are so strong that most of the industry would have no chance against them without trade barriers, Musk warned. “They are extremely good,” he said on the conference call. “If there are no trade barriers, they will pretty much destroy most other car companies in the world.” In the USA, an import tariff of 25 percent keeps Chinese car manufacturers out of the market.
Doubts about Tesla’s new “Autopilot” software
According to previous information, Musk also wants to build a robotaxi without a steering wheel or pedals on the same technical basis as the cheaper model. To do this, Tesla would first have to develop the autonomous driving technology that Musk has been promising for years.
Tesla does have an advanced version of its “Autopilot” assistance system called “Full Self-Driving” (FSD, “completely self-driving”). Contrary to what the name suggests, the technology does not make a Tesla a truly autonomous car: the driver still bears responsibility and must be ready to take control at any time. But FSD is at least trained to observe traffic lights and right-of-way rules. However, the software is still in a testing phase and makes mistakes – while Musk keeps promising that it will be ready soon.
Six months ago, Musk caused a stir when he announced that Tesla was in talks with a large manufacturer that was interested in using the FSD software. Now, when asked, he said that they had only approached it: “I think they think it’s not real yet.” But this year the proof will be provided, he assured.
Musk wants more voting rights at Tesla
Musk reiterated that he would only feel comfortable developing artificial intelligence software and robots at Tesla once he gained more influence at the company. He currently holds around twelve percent of the shares and voting rights – and other investors could therefore boot him out, argued Musk. He is aiming for a quarter of the voting rights. “Ideal” for this would be shares with more voting rights, he now said. With such shares, founders such as Mark Zuckerberg at Facebook Group Meta or Larry Page and Sergey Brin at Google parent Alphabet protect their control over the companies. Musk said he wanted “strong influence, but not control.”
First Optimus robots next year?
At the same time, Musk once again had to curb his own impatience. Ever since he announced that the humanoid robot “Optimus” would one day work on Tesla’s production lines, investors have wanted to know when that would happen. This time too, Musk sidestepped. He at least promised that the first Optimus robots could be built next year.
Missed market expectations
Tesla’s sales rose three percent year-on-year to $25.17 billion. Analysts on average had expected revenue of almost $25.9 billion.
Tesla did not provide any forecast for deliveries in the current year. Analysts were based on an estimate of around 2.1 million vehicles. Last year, after several price cuts, Tesla achieved its delivery target of 1.8 million electric cars – an increase of 38 percent. Musk had previously set a goal of growing by at least 50 percent every year.
Tesla’s quarterly profit jumped from $3.7 to $7.9 billion year-on-year. However, analysts had also expected earnings per share to be higher than the 71 US cents announced.
This didn’t impress investors: Even as Musk was speaking to analysts in a conference call, Tesla shares slipped even deeper into the red after the trading session. On Thursday it was ultimately 12.13 percent lighter in NASDAQ trading at $182.63.
UBS lowers target for Tesla to $225 – “Neutral”
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