After a significant decline in sales at Tesla, company boss Elon Musk wants to bring cheaper models onto the market faster than planned. They are now scheduled to go into production ahead of the originally targeted date in the second half of 2025.
Tesla posted its first sales decline in nearly four years last quarter. Revenues fell by nine percent year-on-year to $21.3 billion (19.9 billion euros), as the electric car pioneer announced after the US stock market closed on Tuesday.
Tesla has recently come under pressure from cheaper competition from China and buyers’ interest in hybrid models. Musk insists that the future only belongs to purely electric drives and once again promised that Tesla would change the industry with self-driving cars.
However, the tech billionaire did not want to provide any information about when exactly and at what price the cheaper Teslas should come onto the market. The question of whether these would be completely new models or adapted versions of the previous bestsellers Model 3 and Model Y also remained unanswered in a conference call with analysts.
The question was legitimate. Originally, a cheaper new model from Tesla was to be developed on a new vehicle platform – just like a robotaxi without a steering wheel and pedals. Musk promised revolutionary production techniques that would make manufacturing more efficient than ever before.
The robotaxi that Tesla plans to present on August 8th will continue to be based on the new platform. Tesla has now announced that the cheaper models will be built on today’s production lines using a mix of old and new processes. In this way, production can be expanded “in uncertain times” with lower investments.
Tesla is still not giving a specific forecast for deliveries for the current year, but expects a noticeable slowdown in the pace of growth compared to 2023. Musk emphasized in a conference call with analysts that he still expected an increase in sales. Last year, Tesla increased deliveries by almost 38 percent to a good 1.8 million vehicles.
Musk spoke particularly much about self-driving cars in the conference call. He reiterated his vision, which he announced years ago, that Tesla owners would be able to send their cars out to earn money autonomously when they don’t need them. You have to imagine it as a mixture of the apartment platform Airbnb and the ride-hailing service Uber, said Musk.
They could also use the car themselves at any time – just like you can have a guest room that is temporarily rented out via Airbnb just for yourself. When presenting the figures, Tesla also showed what the ride service should look like in the company’s app.
The reason why Musk’s long-standing plans have still not become reality is that his developers have not yet managed to make the Teslas truly self-driving. There are already completely driverless robotaxi services – for example from Google sister company Waymo in San Francisco and Los Angeles. But these vehicles have special technology such as relatively expensive laser radars that scan the surroundings. Musk, on the other hand, insists that autonomous driving can only be achieved with cameras.
As a result, the advanced version of Tesla’s “Autopilot” software with the promising name “Full Self-Driving” is so far only an assistance system in which the person behind the wheel must be ready to take control at any time. Tesla recently added the term “Full Self-Driving” to the current version with the addition “monitored” in brackets.
Most industry experts have repeatedly expressed skepticism that autonomous driving with cameras alone would be possible in the foreseeable future, but Musk remains convinced. He said again that Tesla is in talks with a major car company about a license for the advanced “autopilot” technology. At the same time, however, Musk qualified the issue by saying that, given the development times in the industry, even after a possible deal, it would take at least three years before the system appeared in another manufacturer’s vehicle.
Tesla’s humanoid robot “Optimus” can currently carry out simple manufacturing tasks in the laboratory, said Musk. The aim is to bring the machines into the production halls for limited use by the end of the year. And by the end of 2025, they will also be available for sale to other companies. Musk reiterated that he believes “Optimus” will be more valuable than anything else at Tesla in the long run.
Wall Street, which has seen Tesla shares fall by more than 40 percent since the beginning of the year, liked Musk’s vision. The price rose by a good 13 percent in after-hours trading. The quarterly results were even less attractive than expected. The bottom line is that quarterly profits fell by 55 percent to 1.13 billion dollars (1.06 billion euros).
The decline in business figures became apparent after Tesla missed expectations in the first quarter with deliveries of around 387,000 vehicles. It was 8.5 percent less than in the same quarter of the previous year – and a slump of 20 percent compared to the last quarter of 2023. Tesla also pointed out, among other things, that production at the Grünheide plant near Berlin was temporarily suspended in the first quarter after an attack on the power supply became.
Musk is cutting more than one in ten jobs. Over the weekend, Tesla again reduced the prices for some model variants.
