Tesla bought record sales of its electric cars with price reductions – and that had an impact on profit development, as it turned out on Thursday evening when the quarterly figures were presented. Company boss Elon Musk was nevertheless prepared to further price cuts if the economy deteriorated.
At the same time, Musk made some firm promises: He believes that by the end of the year, the advanced version of Tesla’s “Autopilot” assistance system will be able to drive a vehicle better than a human.
In addition, according to Musk, the most modern version of the autopilot technology could be used for the first time in vehicles from another brand. Tesla is in talks with a major manufacturer, the tech billionaire said. He did not name the interested company.
Tesla’s business was again marked by records last quarter. Deliveries increased by more than 80 percent year-on-year to more than 466,000 vehicles, partly due to the expansion of production in Grünheide near Berlin.
Sales grew more slowly by 47 percent to $24.9 billion. And earnings growth was even more subdued, rising 20 percent to $2.7 billion. However, with the quarterly results, Tesla beat analysts’ expectations, who had expected even more pressure from the price cuts.
Musk always emphasizes that for growth he also accepts a decline in profitability. He argues, among other things, that in times of high interest you have to sell cars cheaper so that they remain affordable. At the same time, Musk sees that Tesla is willing to reduce production costs through greater efficiency.
A big question in the industry is whether Musk will start a price war in which other manufacturers have to fight for customers for their discounted electric models. Competitor Ford lowered the price of its F-150 Lightning electric pickup by $10,000 this week. Pickups are the most popular vehicle class in the US and Tesla wants to enter the market with its “cyber truck”.
The operating margin – the ratio of sales to operating profit – fell for the third consecutive quarter to 9.6 percent.
Notable is a significant increase in R&D expenses from $771 million in the previous three months to $943 million.
The group is currently preparing the series production “Cybertruck”. A few days ago, the construction of the first pick-up in Texas was announced. On Wednesday, Tesla clarified that it was still a pre-version of the vehicle. Musk did not answer the question about the planned “Cybertruck” award.
In the conference call with investors and analysts, Musk announced, among other things, that a planned Tesla robot taxi will have a “revolutionary design with a revolutionary construction”. As a result, it will be possible to build more vehicles per hour than any manufacturer.
Musk once again promised that already sold Teslas would be significantly upgraded with the activation of autonomous driving functions. Musk is referring to the latest version of autopilot, which Tesla calls “Full Self-Driving” (FSD). Drivers in the US can currently test them.
Contrary to what the name suggests, FSD does not make the vehicle an autonomous car by the usual industry definition, but is still considered an assistance system. Videos from FSD testers showed some serious software errors that needed to be corrected by the human driver. Musk points to rapid improvements through the evaluation of large amounts of data.
Unlike other developers, Tesla relies on cameras on the vehicles and does without more expensive laser radars that scan the environment.
Musk acknowledged that he had often made overly optimistic predictions about the capabilities of the FSD software. Still, he now said, “I think we’ll be better than a human by the end of the year.”
That does not mean that the software will also be approved by the regulators, he says in a later breath. And it’s only about the US market, because you have to focus on one market first.
Tesla shares fell more than eight percent in after-hours trading — while they were slightly higher prior to the conference call.
(dsc/sda/dpa)
Source: Watson
I’m Ella Sammie, author specializing in the Technology sector. I have been writing for 24 Instatnt News since 2020, and am passionate about staying up to date with the latest developments in this ever-changing industry.
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