Tesla's CEO, Musk, to increase his time commitment amidst plummeting profits.
Woah, Elon Musk's Leading the Charge Again - This Time, With Tesla!
AP, NEW YORK
Elon Musk announced that he'll be dedicating less time nipping at the government's pockets and more to Tesla Inc's electric vehicle (EV) operations, following Tesla's significant drop in profits.
During a conference call with analysts, Musk stated, "See ya later, Department of Government Efficiency [DOGE]—I'm hitting the ground running with Tesla starting next month." Musk shared his expectations for a weekly commitment of just "a day or two" towards government matters.
Tesla grappled with vehicle sales as consumers lashed out over Musk's leadership of DOGE – a jobs-cutting squad that's causing quite the stir stateside. Austin, Texas-based Tesla reported a whopping 71% drop in profits and a 9% decline in revenue for Q1.
Wedbush Securities Inc analyst Dan Ives remarked, "It's about damn time Musk gets his head back in the game. This is exactly what Tesla investors wanted to see." On Wednesday, Tesla stocks skyrocketed more than 5%, although they're still down over 40% for the year.
Tesla confirmed it'd roll out a budget-friendly version of its hit vehicle, the Model Y SUV, in the first half of 2023. They also stuck to their predictions of launching a driverless robotaxi service in Austin this June and having most of their fleet autonomous by next year.
During a post-results conference call, Musk shared, "Get ready for a whole army of self-driving Teslas hitting the streets like a boss in the second half of the year."
The upcoming robotaxi release will feature zero steering wheel or pedals, coming at a time when US federal regulators are still investigating if Tesla's technology is completely safe for driverless vehicles. Tesla's Autopilot, which can steer or brake the car but requires human oversight, is under investigation for its efficiency in alerting drivers when their focus wanes. Full Self-Driving, a controversial service that's nowhere near fully autonomous and has drawn criticism for its name, has also faced scrutiny for its role in accidents in low-visibility conditions.
When it comes to competition, there's a new sheriff in town for Tesla, which once monopolized the EV market. Chinese EV maker BYD Co has developed an electric battery capable of charging in minutes, while Tesla's European rivals are shaking things up with advanced technology models challenging Tesla's throne. Musk's questionable support for far-right politicians in Europe has also ruffled some potential buyers' feathers.
Tesla's Q1 profits plummeted from $1.39 billion to $409 million, or $0.12 a share. Revenue dropped from $21.3 billion to $19.3 billion in the January-through-March period, also missing analyst estimates. Tesla's gross margin fell from 17.4 percent to 16.3 percent.
Tesla anticipates being less affected by the Trump administration's tariffs than most US car companies since it manufactures most of its cars domestically. However, it won't be completely freed from their grasp. Import taxes will still target some materials for Tesla's vehicles sourced from abroad.
Tariffs could also take a toll on Tesla's energy storage business. Plus, China's retaliation could consequences for Tesla, forcing the company to halt orders from Chinese customers for two models: the Model S and Model X. Tesla manufactures the Model Y and Model 3 for China at its Shanghai factory.
- Elon Musk expressed his intention to focus more on Tesla Inc's electric vehicle operations, having dedicated less time to government matters following Tesla's significant drop in profits.
- Dan Ives, an analyst at Wedbush Securities Inc, welcomed Musk's decision, stating it was what Tesla investors wanted to see.
- Chinese EV maker BYD Co is posing a challenge to Tesla's dominance in the EV market, with its development of an electric battery capable of charging in minutes.
- Tesla is still subject to import taxes on some materials for its vehicles sourced abroad despite manufacturing most of its cars domestically.
