Model 2 postponed, stock price plummeted 40%, global layoffs...... Tesla's return to chaotic "wartime mode" has sparked a strategic shift led by Elon Musk: a shift in focus from launching new models to going all-in on autonomous driving. At the beginning of this year, the hottest topic around Tesla was the Model 2, an entry-level model that had been in the making for four years and positioned lower than the Model 3, which was originally expected to go into production in mid-2025, helping Tesla break out of the fierce global price war and open up a new growth curve. But plans have not caught up with the changes, and earlier this month media reported that Tesla had abandoned the development plan for the Model 2, a low-cost model, and shifted its focus to the development of the Roborobotaxi. Subsequently, Musk announced that he would officially release Robotaxi on August 8, which actually confirmed the content of this report. The latest media reports have also revealed that Tesla is "doing everything it can for autonomous driving", and that robo-taxis are now prioritizing new models, both in terms of setting schedules and arranging production capacity. The change came as a surprise to investors, analysts, and even Tesla insiders, and Tesla's stock price accelerated its decline after the news. On Tuesday, Tesla will report its first-quarter earnings report, and the current market expectations are not optimistic.
Walter Isaacson mentions in "Musk's Biography" that Musk sometimes enters a state of "destructive demon mode", which causes a lot of chaos but also allows Musk to achieve his goals more efficiently. At the moment, Musk, who is in "demon mode", may not care about short-term chaos, and is bent on "all in" RoboTaxi and FSD.
"Wartime CEO" goes all-in on FSD Last week, after sending a company-wide email announcing that Tesla would lay off more than 10% of its workforce worldwide, Musk liked a post on X that said Musk had re-entered wartime CEO mode and decided to bet the entire company on Robotaxi.
Musk also swapped his avatar on X back to the Devil Champion costume he wore for Halloween 2022. The 10% layoff means that Tesla will lose 14,000 jobs worldwide, but the media quoted people familiar with the matter as saying that the actual number of layoffs may exceed 20,000, and Musk's reason is that Tesla should reduce the number of employees by 20%, because from the fourth quarter to the first quarter, Tesla's car deliveries fell by 20%. And the employees who avoided layoffs and stayed at Tesla also felt more uneasy than lucky at this time. According to the aforementioned media outlets, Tesla employees believe that Musk has fundamentally changed the "marching order", and he declared last week that the company is "doing everything in its power for self-driving". The outlet, citing a person familiar with the matter, said that robo-taxis now take precedence over a cheaper car that Musk first proposed four years ago, both in terms of setting schedules and arranging production capacity. Musk has a long history of obsession with self-driving, and he once called himself "the boy who cried for FSD." For a long time, Musk regarded self-driving and Robotaxi as Tesla's most important products, believing that their potential value could be as high as trillions of dollars. For more than a decade, he has been talking about the prospects of autonomous driving and convincing customers to pay thousands of dollars for FSD products.
Investors are losing patience and Tesla's abrupt shift in strategy is likely due to Musk and engineers seeing a breakthrough in FSD. According to media reports, in November last year, Tesla began rolling out the V12 version of Full Self-Driving (FSD) to employees. FSD V12 is considered a major leap forward in Tesla's self-driving technology, and it is the first time that Tesla has started using neural networks for vehicle control, including controlling steering, acceleration, and braking. Tesla's self-driving program director Ashok Elluswamy wrote on X last month that this should lead to "unprecedented progress." However, Musk and the engineers' optimism about FSD has struggled to erase concerns about regulatory uncertainty. In the U.S., driverless cars are currently only allowed for limited testing in specific areas, with varying attitudes from state to state. There are also many legal and regulatory hurdles to roll out FSD across the U.S. and even globally, which will significantly narrow the market in which it can be sold, affecting production and profitability. Still, Musk believes that by making FSD available to more consumers and lowering prices, Tesla could make robo-taxis a reality. He's pushing for test drives and a 30-day free trial to promote the feature, increase revenue, and collect more data. But investors are running out of patience for Tesla. Bloomberg analyst Steve Man said investors, especially institutional investors, are losing patience and that the initial hype about fully autonomous driving and robo-taxis has waned and that "the pendulum has swung in the opposite direction". Deutsche Bank analyst Emmanuel Rosner said last week that "Tesla's stock will need to undergo a potentially painful shift in ownership base after investors focused on Tesla's EV sales and cost advantages, but they may throw in the towel." He downgraded Tesla's stock rating from buy and lowered his price target by more than a third. On Tuesday, Tesla will report its first-quarter results, with the market expecting a 40% plunge in operating profit and a revenue decline for the first time in four years. ⭐ Star Wall Street news, good content do not miss ⭐ This article does not constitute personal investment advice, does not represent the views of the platform, the market is risky, investment needs to be cautious, please make independent judgment and decision-making.