After Tesla's stock price plummeted due to first-quarter delivery data, an exclusive media report once again pushed it to the forefront.
On Friday, local time, media reported that Tesla has abandoned the production plan of the low-cost Model 2 and instead focused on the development of self-driving robot taxi technology.
Musk was quick to respond, accusing the media of "lying" in a post on Platform X, but did not point out any specific mistakes.
Tesla's stock price plunged more than 6% at one point after media reports, but recovered some of its losses after Musk's post, narrowing its decline to 3.6% by Friday's close.
Soon after, Musk posted on X: "Tesla Robotaxi will be unveiled on August 8", and Tesla's stock price responded to the upward counterattack in after-hours trading.
This seems to suggest that Tesla may have shifted its focus to Robotaxi, which confirms previous media reports that Tesla has abandoned the development of cheap cars.
Investors once saw cheap cars as a new growth point for Tesla's performance, but now this rosy vision has come to naught. At the same time, Robotaxi may not be able to support Tesla's next phase of growth due to numerous regulatory hurdles, high costs, and the fact that self-driving technology is not yet mature.
Competition in the global electric vehicle market is intensifying, Tesla sales continue to weaken, and once-enviable profit margins are shrinking. The biggest question for Tesla is no longer whether it will be able to produce enough cars, but whether people will buy them.
Tesla's stock price has fallen 34% so far this year, making it the worst-performing component of the S&P 500. Although Tesla remains the world's most valuable automaker, its market capitalization has shrunk by more than half from its peak in 2021.
"Tesla is moving from a golden age into a challenging era," commented Mark Fields, former CEO of Ford.
When Tesla was at its peak, Musk turned his attention to robots
Looking back at history, Musk had already planted the seeds of the problem three years ago.
In 2021, Tesla came out of the quagmire of financial difficulties and production for several years, and its profits continued to hit new highs, and the momentum was unmatched.
At the time, the chip shortage forced many competitors to cut production, but Tesla's factory was still running at full speed. Consumer demand is hot, and even though Tesla frequently raises prices, new car orders are still lined up for months, and used cars are even at a premium.
As other car companies compete to follow Tesla's lead and catch up on the electric vehicle track, Musk has already set his sights on artificial intelligence robots to lead the next outlet.
In the summer of 2021, Musk appeared at the Tesla job fair in Palo Alto in his iconic black outfit and unveiled Tesla's latest achievement, the humanoid robot Optimus.
At the time, Musk told the audience: "Tesla is much more than just an electric car company. In the future, manual labor will become an option. "
In late October 2021, car rental company Hertz said it was ordering 100,000 Tesla vehicles to expand its electric vehicle fleet. For investors, the deal means that electric vehicles are becoming mainstream, and soon more drivers will have the opportunity to try electric vehicles.
At the beginning of November 2021, Tesla's market capitalization finally exceeded $1.2 trillion, soaring more than 20 times in two years.
However, the good times were short-lived.
Musk began to sell Tesla shares, which lasted for more than a year, cashing out more than $39 billion in total, causing panic in the market. Some of the money was used to buy Twitter, putting pressure on Tesla's stock price.
Supply chain issues have come to the fore, with Musk shelving his plans for cheap cars in favor of a more costly FSD
Entering 2022, more surprises followed.
Musk announced that he would not launch a new model that year due to supply chain problems, and the low-cost car development plan was also shelved. At that time, Tesla sold four models, with the Model Y and Model 3 accounting for most of the sales.
"We have enough on our plate at the moment," Musk said.
For car companies that rely on new products to attract consumers, this move is extremely risky. Analysts have questioned whether Tesla can meet its growth targets with its current models.
Musk dismissed this concern. Instead, he hinted at his vision for the future: Tesla cars will be able to operate autonomously around the clock, making them even more valuable.
Musk said: "From the point of view of the problem, the importance of autonomous driving (FSD) is not fully recognized. ”
Now it seems that Musk has long bet on Tesla's future on autonomous driving, especially Robotaxi.
In the second half of the year, Tesla's all-important Chinese market showed signs of weakness, with the waiting time for new cars plummeting from more than four months to one month.
Executives have urged Musk to restart the budget car program, saying it is key to growth and supporting self-driving projects, but Musk is adamant about developing Robotaxi and is more interested in developing self-driving cars that can operate in a fleet of robo-taxis.
Subsequently, FSD technology developed rapidly, and Tesla's sales performance disappointed.
In order to stimulate demand, Tesla cut prices by 7% in China in October, and then launched a series of car purchase discounts in the United States. However, Tesla's 2022 end still disappointed the market. Its annual vehicle deliveries grew 40% year-over-year, but it fell short of the company's initial target and fell short of Wall Street expectations.
For the full year of 2022, Tesla's stock price recorded its worst annual performance ever, falling 65%.
Tesla, which does not have a new car, will not be able to convince consumers to pay for it with a big price cut
In January 2023, Tesla was forced to slash prices globally, with a maximum reduction of nearly 20%. This is tantamount to a big gamble, but Musk believes that with higher profit margins, Tesla can withstand the price war and take the opportunity to pressure competitors.
This strategy did boost Tesla's sales for a while. According to Wells Fargo, in the first half of 2023, Tesla car prices fell by an average of 12% worldwide, and deliveries increased by 19% compared to the previous six months.
But in the second half of 2023, that strategy seems to be failing. Tesla continued to cut prices and increase incentives, but growth in the company's car deliveries slowed to 3%, a figure that Wells Fargo analysts called "worryingly low."
Some in the automotive industry are also starting to get dissatisfied with electric vehicles.
Dealers are concerned about inventory overstocking, and automakers are scaling back their investments in electric vehicles in favor of more popular hybrid models. Tesla itself has no plans for any new models other than the highly anticipated but frequently bouncing Cybertruck.
Competition in the Chinese market is even more fierce. Local brands such as BYD have accelerated the launch of affordable electric vehicles to seize the opportunity in the domestic market and begin to expand overseas.
Hertz, the car rental giant that once bought Tesla heavily, has also sold one-third of its electric vehicles, most of which are Tesla vehicles, due to the low value retention rate and high maintenance costs of electric vehicles.
Then there was the news from earlier this week. In the first quarter of 2024, Tesla's global deliveries fell 8.5% year-on-year to 386,800 vehicles, the lowest since the third quarter of 2022 and well below Wall Street's lowered expectations.
At the same time, since the acquisition of Twitter, Musk has frequently spoken out on sensitive issues on social media, and the negative impact has become more apparent. According to market intelligence firm Caliber, Tesla's "considered purchase rate" among U.S. consumers fell from 46% to 35% from September 2022 to March 2024
In the face of declining performance, Musk argued on a first-quarter call that Tesla is in a transition period between two growth cycles.
The first wave started with the global expansion of the Model 3/Y, and we believe that the next wave will be sparked by the global expansion of the next generation of vehicles.
He pinned his hopes on the next generation of electric vehicles, including a budget car, which was originally scheduled to go into production by the end of 2025. According to media reports at the time, Tesla may name the budget car Model 2, which will cost around $25,000. This makes Wall Street once again full of hope for Tesla's future.
However, with the Robotaxi finalized, there is speculation that the budget car plan will be shelved again.
Between cheap cars and cybertrucks, shouldn't Musk choose the former?
Although Musk pointed to several issues that affected first-quarter results, including the disruption of the Red Sea supply route and the shutdown of the Berlin factory in Germany, former executives and analysts said that Musk must now personally lead Tesla through the most difficult period since the 2018 "crisis".
A former Tesla executive, who reports directly to Musk, said: "At the end of the day, he's not a magician, even though he's been looking like a magician for the past 15 years." "To be honest, I don't know what leverage he used. Without a new product, he will not take further price action. ”
"They put their money in the wrong place, they should have put their money into the Model 2, not the Cybertruck," the former executive said. ”
Musk also admitted on last year's Q3 earnings call:
"To develop the Cybertruck is to dig your own grave. ”
Musk has previously warned that it will be difficult to increase production of the Cybertruck, which may only reach 250,000 deliveries a year in 2025. According to media estimates, the current production rate of 4680 batteries is only enough to equip 24,000 Cybertrucks a year.
This article is from Wall Street News, welcome to download the APP to see more