As a car enthusiast who listens to Tesla (TSLA) On the earnings call on Tuesday, April 23, something seemed wrong.
An hour before the call, Tesla announced the release of the update. Model 3 performance; a very fast and very promising car that had impressive figures.
With that in mind, I went into the so-called “car-centric,” expecting some boasts about the new car's performance numbers, as well as additional updates on the “$25,000 car” that Tesla CEO Elon Musk has denied having deleted.
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However, that was not the case. Instead, we got a little joke that sounded like she was talking about something she hated talking about; as if a single mention of a supposedly affordable car would shut us all up.
“We have updated our future vehicle lineup to accelerate the launch of new models,” Musk said.
“These new vehicles, including more affordable models, will use aspects of the next-generation platform as well as aspects of our current platforms, and we will be able to produce on the same manufacturing lines as our current vehicle lineup.”
What that looked like to me, and to the analysts listening to the call, was that the whole “$25,000 car” thing isn't happening.
“We understand 'more affordable' as potentially dissatisfied versions of the Model Y/Model 3 with improvements in software and ai/hardware capability, but at lower prices,” Morgan Stanley analyst Adam Jonas told Reuters.
Despite all this, the strangest aspect of the call was that the way Musk talked about Tesla differed from a few months ago. It seemed as if he wasn't running a car company, but rather some sort of confusing robotics and artificial intelligence company that was determined to build the next generation of Robotaxis.
Later in the call, I heard a discordant response to my provocation from none other than Musk himself.
“We should be considered an ai robotics company. If you value Tesla simply as an automotive company, that's simply the wrong framework. If you ask the wrong question, then the right answer is impossible.”
“If someone doesn't believe Tesla is going to solve autonomy, I think they shouldn't be an investor in the company. And we will. And we are.”
Although many other enthusiasts and “Tesla believers” have seen signs indicating this in the past, I knew in that moment that the Elon Musk I was listening to on that call was not the Elon Musk I knew from before.
The Elon I (used to) know
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In 2006, Musk wrote a blog post titled “Tesla Motors' Secret Master Plan (just between you and me).” In it, he describes in detail how the electric sports car they were working on at the time would be the catalyst for more affordable vehicles in the future.
“Almost any new technology initially has a high unit cost before it can be optimized and this is no less true in the case of electric cars,” he said. “Tesla's strategy is to enter the high end of the market, where customers are willing to pay a premium, and then move down the market as quickly as possible until reaching higher unit volumes and lower prices with each successive model. “.
If I had enough free time, enough sanity in my head, and enough energy in my fingers, we could talk endlessly about Elon's bad behaviors, many failures, and shortcomings. However, one issue remains clear and can be addressed using a quote from Bruce Lee in “Enter The Dragon.”
“Never take your eyes off your opponent, even when you bow.”
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Every minute that Tesla leaders spend asleep at the wheel and doing their thing with robotaxis, artificial intelligence and robots, is an extra minute for all the other EV-producing automakers to catch up.
Although I quoted Bruce Lee, the threat against Tesla is not just Chinese giants like BYD. (WILLPOWER) child (CHILD) Xpeng or Chery.
The real threat comes from all the other automakers. They have the money, the capacity and the commitment to make electric vehicles of equal or better quality than Tesla.
rivian
At a time when Etsy stores are selling new Tesla owners detailed delivery inspection guides to detect defects, Rivian (RIVN) and lucid (LCID) They are formidable opponents, but the ones Tesla should really worry about are Ford (F) General Motors (G.M.) and sling (HMC) .
Right now, traditional automakers are focusing on plug-in hybrids due to slowing sales of electric vehicles. Elon Musk knows that this situation can be a great opportunity for Tesla.
Opportunities abound for Tesla
“As we've all seen, the global EV adoption rate is under pressure and many other manufacturers are abandoning EVs and opting for plug-in hybrids,” Musk said.
“We believe this is not the right strategy and that ultimately electric vehicles will dominate the market.”
The problem I have with this statement is that while Musk's assumption is correct about plug-in hybrids, he doesn't complement it with anything material.
Automakers take a step back, even if it's a small step, It doesn't explicitly mean that automakers are giving up on electric vehicles altogether. They will catch up.
Take for example one of those “other manufacturers” that Musk might have had in mind: Ford.
Ford vs. Tesla
Although Ford has said it is changing its electric vehicle projects, it admits it is losing money on its electric cars. During its earnings conference call on Wednesday, April 24, Ford CEO Jim Farley said he's still betting on a “new, small, affordable” car because they know people will buy it.
“Well, when we look at the connected car data of our electric vehicle customers, we notice that people live in the suburbs, urban customers tend to drive shorter distances and the vehicles are more affordable, more accessible, and we think that's where The adoption of electric vehicles will be the fastest,” Farley said. “We believe we can compete in car and small vehicle segments, more affordable vehicles in a unique way that is Ford.”
“We learned a lot when, on our most expensive vehicles, Mach-E, when we lowered the price by 17% in February, our volume increased by 141%. “That tells us that the more affordable we can make a great product, the more attractive it will be to mainstream EV users.”
More electric vehicle deals:
- A complete list of electric and hybrid vehicles that qualify for federal tax credits
- Here's why electric vehicle experts are criticizing Joe Biden's car policy
- The electric vehicle industry faces an unusual new problem
Whether the car is Ford or Tesla, a cheaper electric vehicle made with a trusted name will be sold. Better yet, industry insiders know that a cheaper car would not only have a significant fiscal impact on companies like Ford or Tesla, but would put them at the forefront of important cultural and social changes.
Sandy Munro, CEO of automotive engineering firm Munro & Associates and face of YouTube channel Munro Live he told Forbes that “(Tesla) is going to sell them all day long. And woe to those who are trying to compete with them!”
“It will be a popular car that everyone can afford. Like a Volkswagen.”
Epilogue: Tesla can return to reality
Tesla is capable of making a car cheaper, whether it's a stripped-down Model 3 or a Model Y without some, if not most, of the bells, whistles or premium materials. Better yet, we could have a curveball in the form of a new “Model 2.”
Elon Musk said Tesla will talk about a more affordable car, as well as the whole robotaxi topic, on August 8, 2024. Knowing Elon's track record of promises made and missed, it's anyone's guess what form the “affordable car” will take. , or even if it exists.
It might be the ugliest car in the world, but for the right price, people will swallow it. We will have to see.
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