Tesla profits tumble, Fisker flatlines, and California cities battle for control of AVs | TechCrunch

April 28, 2024 11:33 PM0

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Welp, Tesla earnings happened this week — and yeah that was a lot. A lot of what, you ask? A lot of the same kinds of promises and hand waving we’ve seen before, but just wrapped up in slightly different packaging. The stakes this time around remind me of Tesla’s pre-profit era circa 2018.

Now, to be clear, Tesla has enjoyed profitability since 2020. But it is facing downward pressure on its bottom line — the company saw profits fall 55% year over year — and an aging portfolio of its highest volume vehicles. (And yes, we covered the new Model 3 Performance variant; I’m talking about new mass market models here.)

Tesla CEO Elon Musk need to generate new sources of revenue. And fast. The company can’t wait two years — or more — to launch a new platform to deliver a sub-$25,000 EV.

So, Musk tweaked that plan, from what we know so far. Which isn’t a lot. During the Q1 earnings call, Musk presented an opaque plan, with few details, to launch multiple cheaper EVs in 2025 (and maybe even late 2024).

Musk understands that the market has rewarded him in the past for being a forward thinker and an innovator — even if those plans don’t come to fruition. So, Musk also pulled on that futurist lever, promising greater levels of automated driving capability in its FSD driver-assistance software and a robotaxi (again). Lest you forget, Musk announced during the company’s Autonomy Day in 2019 that Tesla was going to launch a robotaxi network by the following year. Musk has talked about the Tesla Network and ambitions to allow owners to place their vehicles on the ride-hailing app since 2016.

Shareholders responded with glee because the future is now, or maybe next year. Okay, maybe at the end of the decade? Anyway, it’s exciting.

In an unrelated note, the recently departed high-profile Tesla exec Drew Baglino sold about 1.14 million of his shares worth $181.47 million. The filing described it as an exercise of stock options.

Let’s go!

A little bird

A little bird pointed out to me that Valeo CTO Geoffrey Bouquot is leaving the company after eight years. For the unfamiliar, Valeo is a French car parts supplier that has pushed into the EV and automated driving space. The company even has an AI research center dedicated to automotive applications.

That EV sector had been promising for Valeo, but this recent quarter reflected what is happening in the rest of the sector. The company posted lower first-quarter sales after its high-voltage electrification system sales fell by nearly half. Valeo is now adjusting to automakers’ needs aka hybrids.

Got a tip for us? Email Kirsten Korosec at [email protected], Sean O’Kane at [email protected] or Rebecca Bellan at [email protected]. If you prefer to remain anonymous, click here to contact us, which includes SecureDrop (instructions here) and various encrypted messaging apps.

Deals!

Who’s got deals? We do. Here are a handful that stood out.

Chemix, a company using AI to speed up the development of next-gen EV batteries, raised $20 million in a Series A funding round led by Ibex Investors. Other participants included Mayfield Fund, Berkeley SkyDeck and Urban Innovation Fund as well as strategic investors BNP Paribas Solar Impulse Venture Fund, Global Brain’s KDDI Open Innovation Fund III and Porsche Ventures.

LanzaJet, a sustainable fuels technology company and fuels producer, received an undisclosed investment from Microsoft’s Climate Innovation Fund. A report in Axios Pro says the company is raising $100 million and expects to close this quarter.

Outpost, an Austin, Texas-based startup that manages a network of semi-truck parking facilities, raised $12.5 million in a Series A funding round led by GreenPoint Partners. The newly branded company, founded in 2021 under the name Semi-Stow, also received backing from Speedwagon Capital Partners.

Radical, a Seattle-based startup developing solar-powered, high-altitude autonomous aircraft, raised $4.5 million in a seed round led by Scout Ventures, with additional funding from investors, including Inflection Mercury Fund and Y Combinator.

Solera, the automotive data and software-as-a-service company, is evaluating an initial public offering that could raise more than $1 billion, Bloomberg reported.

Stark Future, a Spanish startup that makes off-road electric motorcycles, raised €25 million from Big Bets. The company will use the funds to expand production capacity for its Stark VARG electric off-road motorcycle.

Notable reads and other tidbits

ADAS

The National Highway Traffic Safety Administration closed a long-standing investigation into Tesla’s Autopilot driver-assistance system after reviewing hundreds of crashes involving its misuse, including 13 that were fatal and “many more involving serious injuries.” Tl;dr: The agency called Tesla’s driver engagement system “weak” and said it was “not appropriate for Autopilot’s permissive operating capabilities.”

Autonomous vehicles

TC reporter Rebecca Bellan has been keeping track of legislative activity in California — one of the hotbeds of AV activity. Check out the latest on four bills that are being considered by the state legislature and how one in particular could put cities in a more powerful position.

Electric vehicles, charging & batteries

Faraday Future is about to get booted from the Nasdaq Capital Market — a tier within the exchange for lower valued companies — because its share price has been too low, for too long.

Fisker is planning more layoffs less than two months after cutting 15% of its workforce. The company expects to seek bankruptcy protection within the next 30 days if it can’t come up with that money, according to a regulatory filing.

Mercedes gave us a close look at the upcoming all-electric G-Class — the “Birkin bag” of the automaker’s portfolio. Read more about how it compares to the gas-powered version.

Rivian is offering discounts of up to $5,000 on its EVs — and a year of free charging — to customers willing to trade in eligible gas-powered trucks and SUVs. Those eligible vehicles, which include the Ford F-150, reveal what customers Rivian is targeting.

Future of flight

Amazon ended Prime Air drone delivery operations in Lockeford, California. The Central California town of 3,500 was the company’s second U.S. drone delivery site, after College Station, Texas.

Joby Aviation, the California company developing electric aircraft, signed a memorandum of understanding agreement with three Abu Dhabi government departments to establish an electric air taxi service ecosystem.

Zipline passed a major milestone this week. One of its autonomous drones, called “Zips,” carried two bags of IV fluid from Zipline’s distribution center in Ghana’s Western North Region to a local health facility — the company’s millionth delivery.

In-car tech

Here’s a nerdy one I enjoyed. Automotive electronics supplier Elektrobit announced EB corbos Linux for Safety Applications. What do those words even mean? Ars Technica has a nice explainer, but basically Elektrobit developed an open source-based automotive operating system that has been certified for automotive safety compliance. If you care about “software-defined vehicles,” this matters!

This week’s wheels

Image Credits: Kirsten Korosec

The 2024 Lexus LC 500h is not an EV. But over here at TC, we are also interested in hybrids! Plus, it’s been a minute since I have spent some time exploring the many offerings under the Lexus brand. The Lexus LC 500h starts at $101,250, but the version I drove popped up to $113,350 thanks to some additional premium touches like an upgraded audio system, retractable wing and a carbon fiber roof.

The Lexus LC 500h isn’t a vehicle you see every day, or year even. I suppose it’s because coupes are not so popular these days — crossovers rule that roost — although I quite like the looks and proportions of the Lexus LC 500h and its V8-engined twin.

This vehicle comes with a 3.5L, six-cylinder hybrid engine that produces 354 horsepower thanks to the addition of an electric motor that delivers power to the rear wheels. Another electric motor is what charges up the vehicle’s battery.

The curious part is that this vehicle has a multistage transmission. So basically this means that Lexus took its existing electronically controlled, continuously variable transmission system and then added another gearbox (a four-speed transmission) behind it. The thinking is that this gives drivers a sportier experience and 10 different gear selections via the paddles behind the steering wheel when the vehicle is in manual mode. The Lexus multistage hybrid system has been around for years now, but I had yet to really play around with it.

My take: After some time in manual mode, I found myself just putting it back in “drive” and letting the vehicle do the work for me.

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TikTok faces a ban in the US, Tesla profits drop and healthcare data leaks | TechCrunch

April 28, 2024 2:09 AM0

Welcome, folks, to Week in Review (WiR), TechCrunch’s regular newsletter covering this week’s noteworthy happenings in tech.

TikTok’s fate in the U.S. looks uncertain after President Joe Biden signed a bill that included a deadline for ByteDance, TikTok’s parent company, to divest itself of TikTok within nine months or face a ban on distributing it in the U.S. Ivan writes about how the impact of TikTok bans in other countries could signal what’s to come stateside.

Meanwhile, fallout from the Change Healthcare hack continues. Change, a subsidiary of health insurance giant UnitedHealth, confirmed this week that the ransomware attack targeting it earlier this year resulted in a huge theft of Americans’ private health info, possibly covering “a substantial proportion” of Americans.

And Tesla profits dropped 55% as the EV company contends with increased pressure from hybrid carmakers. The automaker’s growth plan is centered around mysterious cheaper EVs scheduled to launch next year — as well as perhaps a robotaxi. But a recall on the Cybertruck for faulty accelerator pedals certainly won’t help in the interim.

Lots else happened. We recap it all in this edition of WiR — but first, a reminder to sign up to receive the WiR newsletter in your inbox every Saturday.

News

Amazon grocery plan: Amazon launched a new unlimited grocery delivery subscription in the U.S. The plan, which costs $9.99 per month for Amazon Prime users, comes with free deliveries for grocery orders over $35 across Amazon Fresh, Whole Foods Market and other local grocery retailers.

California drones grounded: In more Amazon news, the tech giant confirmed that it’s ending Prime Air drone delivery operations in Lockeford, California. The Central California town of 3,500 was the company’s second U.S. drone delivery site after College Station, Texas; Amazon didn’t offer any details around the setback.

Fisker plans layoffs: Fisker says it’s planning more layoffs less than two months after cutting 15% of its workforce, as the EV startup scrambles to raise cash to stay alive. Fisker expects to seek bankruptcy protection within the next 30 days if it can’t come up with the money.

Stripe expansion: Among a slew of other announcements at its Sessions conference in San Francisco, Stripe said that it’ll be de-coupling payments from the rest of its financial services stack. Given that Stripe previously required businesses to be payments customers in order to use any of its other products, that’s a big change.

Analysis

Rabbit hands on: Brian writes about the R1, the first gizmo from AI startup R1. The $199 price point, touchscreen and funky aesthetic from storied design firm Teenage Engineering make the R1 far more accessible than Humane’s Ai Pin, he concludes.

Lab-grown diamonds: Pascal, an Andreessen Horowitz-backed startup, claims it can make high-end jewelry accessible by using lab-grown diamonds chemically and physically akin to natural diamonds but that cost one-twentieth of the price.

AI poetry: An experiment called the Poetry Camera — an actual, physical camera — combines open source technology with playful design and artistic vision. Instead of merely capturing images, the Poetry Camera arranges thought-provoking, AI-generated stanzas based on the visuals it encounters.

Rippling deep dive: Connie interviewed Parker Conrad, the CEO of workforce management startup Rippling, on the company’s new $200 million funding round, new San Francisco lease (the second biggest to be signed in the city this year) and more.

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Tesla Autopilot investigation closed after feds find 13 fatal crashes related to misuse | TechCrunch

April 26, 2024 5:00 PM0

The National Highway Traffic Safety Administration closed a long-standing investigation into Tesla’s Autopilot driver assistance system after reviewing hundreds of crashes involving its misuse, including 13 that were fatal.

At the same time, NHTSA is opening a new investigation to evaluate whether the Autopilot recall fix that Tesla implemented in December is effective enough.

NHTSA’s Office of Defects Investigation said in documents released Friday that it completed “an extensive body of work” which turned up evidence that “Tesla’s weak driver engagement system was not appropriate for Autopilot’s permissive operating capabilities.”

“This mismatch resulted in a critical safety gap between drivers’ expectations of [Autopilot’s] operating capabilities and the system’s true capabilities,” the agency wrote. “This gap led to foreseeable misuse and avoidable crashes.”

The closing of the initial probe, which began in 2021, marks an end of one of the most visible efforts by the government to scrutinize Tesla’s Autopilot software. The Department of Justice is also scrutinizing the company’s claims about the technology, and the California Department of Motor Vehicles has accused Tesla of falsely advertising the capabilities of Autopilot and the more-advanced Full Self-Driving beta software. Tesla, meanwhile, is now going “balls to the wall for autonomy,” according to CEO Elon Musk.

This story is developing…

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Tesla has spent $200K advertising on Elon Musk's X so far | TechCrunch

April 26, 2024 4:02 AM0

Tesla has spent around $200,000 on advertising through February on Elon Musk’s social media platform, X, after the CEO caved to shareholder pressure last year and said his company would “try a little advertising.”

Since then, Tesla ads have showed up in places like Google search results and on YouTube. But it was also increasingly apparent that Elon’s car company was paying Elon’s social media company to advertise, too. We now know how much Tesla paid X thanks to details released Wednesday in its annual proxy statement, which includes a section on “related person transactions” the company has made. (Tesla has not disclosed how much it has spent on advertising overall.)

Tesla also paid X around $50,000 in 2023 and $30,000 through February 2024 for “commercial, consulting and support agreements.” Likewise, X paid Tesla $1 million in 2023 and around $20,000 through February 2024 for the same unspecified work. Tesla doesn’t say exactly what those agreements entail, but the companies have reportedly shared or loaned employees following Musk’s acquisition of X and his increased focus on building AI products at each business.

Essentially, all of Musk’s companies have engaged in transactions like these over the years, and 2023 was no different. The proxy filing shows that SpaceX paid Tesla $2.1 million in 2023 and approximately $800,000 through February 2024 for “certain commercial, licensing and support agreements with Tesla.” Tesla, meanwhile, paid SpaceX $700,000 in 2023 and $100,000 through February 2024 for the use of a corporate jet owned by Musk’s space company. Tesla paid Musk’s tunneling effort, The Boring Company, $200,000 in 2023 and $1 million through February 2024.

Curiously, Tesla says that in December 2023, it hired a security company owned by Elon Musk to provide security services for him, “including in connection with his duties to and work for Tesla.” The company says that already cost $2.4 million in 2023 and around $500,000 through February 2024. It adds that this is only “a portion of the total cost of security services concerning Elon Musk.”

Finally, Tesla also says it was paid $11.5 million in 2023 and around $6 million through February 2024 for scrap materials by EV battery recycling company Redwood Materials, which is run by Tesla board member (and former CTO) JB Straubel.

Texas reincorporation

All of this financial back-and-forth comes as Musk is still in the middle of trying to appeal a recent decision by the Delaware Chancery Court that struck down his massive 2018 stock compensation plan. The judge made that decision in part because she believed Tesla “inaccurately described key directors [of Tesla’s board] as independent and misleadingly omitted key details about the process” of putting the package together.

Musk was furious with the decision and posted on X shortly after that Tesla would “move immediately to hold a shareholder vote to transfer state of incorporation to Texas,” where Tesla has already relocated its physical headquarters.

The proxy reveals that Tesla’s board started a process shortly after to evaluate the idea — they also say they had previously considered moving the company’s state of incorporation, but never decided to — because “redomestication is a Board decision, not a decision for a chief executive officer.” A special committee was formed, led by board member Kathleen Wilson-Thompson. She hired two lawyers from Sidley Austin to represent the committee and engaged an expert lawyer from Delaware, a Chicago law professor, and Houlihan Lokey as financial adviser to help with the process. They also set out to determine what to do about re-voting on Musk’s struck compensation package.

Over eight weeks, Wilson-Thompson’s committee met 16 times for more than 26 hours, and Tesla says she personally spent “more than 200 hours” working on the matter. The Sidley lawyers spent “more than 600 hours each” on the matter and were supported by “more than 40 other Sidley lawyers.” Through this process, seven board directors and five members of Tesla’s management were interviewed.

Tesla goes into detail about how multiple states were considered, before narrowing down to Texas since companies tend to either be incorporated in Delaware or their home state. And the decision was ultimately made to put the move and the “re-ratification” of Musk’s stock plan up to a shareholder vote at the company’s annual meeting, which will now take place on June 13. While it’s hard to imagine either of those votes failing, they are likely to stir up even more legal debate after that vote takes place. Musk and his brother Kimbal, who is a board member, are recused from voting on the move “because of [Musk’s] prior posts on X about reincorporation.”

“The Committee and its counsel are aware of the media narrative regarding Musk, Tesla, and its Board,” the committee writes in the proxy. “And the Committee’s work was conducted against a backdrop of unrelenting public interest in whether Tesla would reincorporate and in Musk’s compensation. Far from being influenced by these factors, this outside narrative and attention intensified the commitment of the Committee and its counsel to conduct a staunchly independent process.”

This story originally misstated who was getting paid in the arrangement between Redwood Materials and Tesla. Redwood Materials has paid the money to Tesla.

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Tesla layoffs hit high performers, some departments slashed, sources say | TechCrunch

April 24, 2024 10:07 PM0

Tesla management told employees Monday that the recent layoffs — which gutted some departments by 20% and even hit high performers — were largely due to poor financial performance, a source familiar with the matter told TechCrunch.

The layoffs were announced to staff just a week before Tesla is scheduled to report its first-quarter earnings. The move comes as Tesla has seen its profit margin narrow over the past several quarters, the result of an EV price war that has persisted for at least a year. The company delivered a record 1.81 million vehicles in 2023. Its margins, however, took a hit after Tesla repeatedly slashed prices in a bid to drum up sales and undercut the competition.

Tesla informed employees that more than 10%, or about 14,000 workers, will be laid off across the global organization that has operations in the United States, Europe and China. In a regulatory filing, Tesla referred to the layoffs as a “company-wide restructuring.” The layoffs, which affected employees across all departments and seniority levels, were made to reduce costs and increase productivity to prepare for its “next phase of growth,” according to an internal email from CEO Elon Musk that TechCrunch has viewed.

High performers also cut

Many of the laid-off employees were high performers, according to two sources who spoke to TechCrunch on condition of anonymity. One source expressed shock at the number of talented employees cut and noted that many of those affected were working on projects that have fallen lower on Tesla’s priority list. The source declined to specify which projects.

Some departments saw layoffs beyond the 10% outlined in the companywide email, according to sources. One manager told TechCrunch that 20% of their employees were cut.

“I lost 20% of my team, some really good players too,” they said.

The shakeup also comes as Musk continues to bend the company’s trajectory toward building fully self-driving cars. Tesla recently dropped plans to build a lower-cost EV that would retail starting at around $25,000, opting instead to use the underlying platform being developed to power an alleged robotaxi that Musk said will debut August 8.

Musk previously tried to prioritize the dedicated robotaxi vehicle project, according to his biographer, Walter Isaacson. In 2022, he told employees that he wanted a “clean robotaxi” with no steering wheel or pedals. Tesla lead designer Franz von Holzhausen and engineering VP Lars Moravy kept running the low-cost EV project in secret and eventually convinced him to make both — that is, until last week when it was reported that Musk changed his mind.

Top execs leave

Two high-profile executives — Drew Baglino, Tesla’s SVP of Powertrain and Energy, and Rohan Patel, VP of Public Policy and Business Development — also left the company.

Patel told TechCrunch he decided Sunday evening to leave Tesla because of “[b]ig overall changes” at the company. Patel, who had been engaging regularly with Tesla customers and fans on X in recent months, declined to be specific. He noted in a message that it would be “better for me not to speculate. … Tesla is going to be stronger than ever, and change is good,” he added.

Baglino told TechCrunch that after 18 years, it was time to leave Tesla. “I feel good about the impact I’ve been able to achieve, my leadership team is strong, the energy businesses I’m responsible for are doing well, etc.,” he wrote in a message to TechCrunch.

“Baglino was in charge of powerdrives and new battery projects, and there’s a sense that there isn’t a whole lot of innovation that’s sustainable at this point, which is probably why Baglino is leaving,” Sandeep Rao, head of research at London-based financial services company Leverage Shares, theorized in an interview with TechCrunch.

Baglino’s departure comes just a few months after Tesla’s previous CFO, Zachary Kirkhorn, stepped down. In January, Musk posted on X, formerly Twitter, that he would want to have around 25% voting control of Tesla in order to focus more fully on the company, rather than on his other companies, and help the EV maker become a leader in AI and robotics.

This article was updated to include information from a regulatory filing that refers to the layoffs as a “restructuring.”

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Tesla's new growth plan is centered around mysterious cheaper models | TechCrunch

April 24, 2024 5:38 AM0

Tesla’s been undergoing some major changes, and now we have a sense of why: the company says it is upending its product roadmap because of “pressure” on EV sales.

The new and accelerated plan now includes “more affordable models” that the company claims will be launched next year. Or if Tesla CEO Elon Musk is to be believed — and that’s a big bet considering his track record with timelines — possibly as early as the end of 2024.

The shock announcement sent the company’s stock soaring more than 11% in after-hours trading Tuesday. And the price didn’t fall even as Musk and other Tesla executives refused to share further details on a call with investors.

This all comes following a bombshell report in early April from Reuters that claimed Tesla had abandoned its work on a low-cost, next-generation car. That next-gen car was meant to be built on the same EV platform Tesla is developing for its supposed robotaxi vehicle. Tesla had said this next-gen car could come as early as late 2025.

While Musk flimsily claimed Reuters was “lying,” both Electrek and Bloomberg News have since reported that the development of that particular EV has been delayed or deemphasized inside the company. Musk has since posted on social media site X that Tesla will reveal the robotaxi August 8.

Tesla provided the update in its less-than-stellar first-quarter earnings report, which showed profits falling 55% year-over-year. The company said in the report it had “updated [its] future vehicle line-up to accelerate the launch of new models ahead of our previously communicated start of production in the second half of 2025.” The slate of new vehicles includes “more affordable models,” the company said.

These new offerings are not being spun out of whole cloth, though. Tesla says it will build these vehicles on existing production lines and that they will “utilize aspects of” the next-generation platform it has been developing, “as well as aspects of our current platforms.”

Bloomberg News reported earlier this week Tesla was working on new versions of the Model Y and Model 3 that borrowed technology and processes from the next-gen EV, with an emphasis on the Model Y.

Tesla investors will have to wait to learn any more.

On a call with investors, Musk punted on the question of what Tesla’s new product roadmap actually involves. “We’ll talk about this on August 8th,” he said, referring to the event Tesla has planned to reveal its robotaxi, which he called “Cybercab.”

When asked a similar question later in the call, Musk said “I think we’ve said all we will on that front.”

Tesla VP Lars Moravy said there was “some risk” associated with the new platform, and that Tesla could leverage “all the subsystems” being developed for it, like powertrains, drive units, as well as improvements in manufacturing and automation, thermal systems, seating,” and more. “All that’s transferrable, and that’s what we’re doing — trying to get it in new products as fast as possible,” he said. “That engineering work — we’re not trying to just throw it away and put it in a coffin.”

Cost versus growth

Tesla has worked to reduce the cost of manufacturing the next-gen EV by 50% compared to the platform that underpins the Model 3 and Model Y.

The company admitted Tuesday that by shifting to a strategy of mixing the next-gen technology and processes with existing platforms and manufacturing lines, it will lose some of that cost savings.

The upside, according to Tesla, is growth. The company claims it can double 2023’s production (which was around 1.8 million vehicles) by 2025. And while it won’t save as much on the cost of the cars, it also won’t have to build new production lines to make these mysterious new vehicles. The company has already slowed work on a new factory in Mexico, where it originally planned to start building the next-generation EV and robotaxi.

Of course, Tesla had said for years that it expected to reach 50% annual growth, averaged over a few years, and has consistently missed that target. As the company warned, it will grow at a “notably lower” rate this year.

There are other challenges as well. Tesla is claiming it can launch this new product lineup after axing a huge number of employees from its global workforce — though Musk said Tuesday the company is “not giving up anything significant that I’m aware of.”

“We’ve just had a long period of prosperity from 2019 to now,” Musk said on the call. “We’ve made some corrections along the way, but it is time to reorganize the company for the next phase of growth.”

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Tesla profits drop 55%, company says EV sales 'under pressure' from hybrids | TechCrunch

April 24, 2024 2:00 AM0

Tesla profits fell 55% to $1.13 billion in the first quarter from the same year-ago period as a protracted EV price-cutting strategy continued to cut into the automaker’s bottom line.

The results, posted after markets closed Tuesday, sent shares up 7% immediately following the release. Tesla reported revenue of $21.3 billion in the first quarter, an 9% drop from the first quarter of 2023.

Analysts polled by Yahoo Finance expected earnings of $0.51 per share on $22.15 billion in revenue.

The company said in its Q1 earnings report that it experienced “numerous challenges in the first quarter, including from the Red Sea conflict and the arson attack at Gigafactory Berlin, to the gradual ramp of the updated Model 3 at its factory in Fremont, California. Tesla also noted that global EV sales continue to be under pressure as many carmakers prioritize hybrids over EVs.

Tesla has seen EV sales grow over the past several years, topping out to a new record of 1.8 million vehicles in 2023. But the company’s profits have suffered thanks to repeated price cuts that started in late 2022.

While those price cuts did provide a temporary bump in sales, it hasn’t had a lasting effect. Tesla delivered 386,810 vehicles in the first quarter of 2024, down 20% from the 484,507 it delivered in the final quarter of 2023. This wasn’t just a quarter-over-quarter blip either; Tesla delivered 8.5% fewer cars than the first quarter of 2023.

Tesla warned in January that growth of its vehicle sales “may be notably lower” in 2024, noting at that time it was between “two major growth waves” and prepping for the launch of a new vehicle platform to build a smaller EV that costs around $25,000. The company has also been prepping a “robotaxi” built on the same platform. In the meantime, Tesla’s only new model is the expensive (and fussy) Cybertruck.

Tesla CEO Elon Musk said during the company’s earnings call in January the smaller and cheaper EV would go into production in late 2025 at the company’s factory in Texas and eventually expand to a yet-to-be-built factory in Mexico.

Three months later, Musk appears to have scrapped the company’s low-cost EV playbook. Musk paused those low-cost EV plans, opting instead to plow headlong into launching the robotaxi, which will be revealed in some capacity in August. Less than two weeks after announcing the robotaxi launch date, Musk oversaw a 10% reduction in headcount and a restructuring that puts autonomy in sharp focus.

Two high-profile executives — Drew Baglino, Tesla’s SVP of Powertrain and Energy, and Rohan Patel, VP of Public Policy and Business Development — also left the company.

This story is developing …

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Tesla launches new Model 3 Performance variant to rev up demand | TechCrunch

April 23, 2024 10:40 PM0

Tesla has officially revealed a new Performance variant of the recently-refreshed Model 3 sedan as the company looks to fight off receding demand.

The new version of the Model 3, which starts at $52,990, has a new active damping system and adaptive suspension for better handling and comfort, 296 miles of battery range and can travel from 0 to 60 miles per hour in 2.9 seconds with 510 horsepower on offer.

Compared to the previous Model 3 Performance, the new version has 32% more peak power and 16% more peak torque, and 5% less drag. It does all this while consuming less energy than its predecessor, according to Tesla. That’s thanks in part to a new-generation drive unit, and also a rear diffuser and spoiler. The front and rear ends of the car have also benefited from a slight facelift, separating it from the other versions of the newly-tweaked Model 3 revealed last year.

The Model 3 Performance still carries with it the wholesale changes made with that recent refresh. That means there’s an ambient light bar wrapping around the cabin interior, better sound dampening and upgraded materials throughout, a stalk-less steering wheel and a new touchscreen display.

Tesla is launching the new Model 3 Performance at a time when the company is coming off one of its worst quarters for deliveries in recent memory, having dropped 20% compared to the fourth quarter of 2023. The impact of that disappointing first quarter is set to be revealed Tuesday when the company publishes its financial results after the market closes.

Tesla is also just one week removed from announcing sweeping layoffs of more than 10% to its global workforce, with the cuts affecting seemingly all corners of the company.

Orders placed Tuesday, at least at the time of publication, show an estimated delivery window of May/June 2024 in North America.

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Tesla earnings week spotlights EV price cuts, 'balls to the wall' autonomy push | TechCrunch

April 23, 2024 10:16 PM0

Tesla investors, still digesting a 43% drop in share price since the beginning of the year, are gearing up for what will likely be unimpressive financial results for the first quarter and a shift in priorities for CEO Elon Musk, who is making more moves to go “balls to the wall for autonomy.”

Tesla is expected to report earnings after markets close Tuesday. The company’s earnings call is scheduled for 5:30 pm ET.

Tesla shares rose Tuesday morning more than 2% ahead earnings, a brief rosy sign amid an otherwise downward trend that’s accelerated since early March. The falling share price comes as Musk pushes forward with a renewed focus on automated driving on two fronts: selling more customers on its advanced driver assistance system known as “Full Self-Driving,” or (FSD) and a moonshot effort to bring a robotaxi to market.

Over the weekend, Tesla dropped the price of its Full Self-Driving (FSD) advanced driver-assistance system to $8,000, down from $12,000. That price cut is in addition to last week’s drop of the FSD monthly subscription to $99, down from $199. The push to get FSD into more cars could be a bid to collect more data as Tesla works to boost the neural networks that will power fuller-scale autonomy. FSD today can perform many driving tasks in cities and on highways, but still requires a human to remain alert with their hands on the wheel in case the system requires a takeover.

Tesla faces narrowing profits as it places a major and expensive bet on autonomous driving technology. Last week, Tesla laid off 10% of its staff in a move to reduce costs in preparation for the company’s “next growth phase,” per an email Musk sent to all employees.

Earlier this month, Musk abruptly announced on X that Tesla was pausing the development of its $25,000 electric vehicle in favor of a robotaxi that he promised to reveal in August. Sources within Tesla have confirmed to TechCrunch that they didn’t have prior warning from Musk on this sudden shift and that internal restructurings reflect a new ethos that puts robotaxi development at front and center.

All of this is happening as Tesla zigzags on its EV pricing strategy.

Last week, Tesla ditched EV inventory price discounts, but over the weekend slashed prices on the Model 3 and Model Y by as much as $2,000 in the U.S., China and Germany. As we saw during the first quarter of 2023, those price cuts are taking their toll on Tesla’s income and margins.

The company will need to convince investors that its shift in priority to autonomous vehicles is a silver lining in the cloud of declining margins, rather than just smoke and mirrors.

What to expect at Tesla’s Q1 2024 earnings

Tesla’s lower first-quarter delivery figures combined with price cuts are ingredients for a smaller profit pie. And analysts seem to agree.

Analysts polled by Yahoo Finance expect a profit of $0.48 per share on $20.94 billion in revenue. As a reminder, Tesla generated $25.17 billion revenue in Q4 and $23.3 billion in the first quarter of 2023.

Tesla delivered 386,810 vehicles in the first quarter of 2024, down 20% from the 484,507 it delivered in the final quarter of 2023. It’s worth noting that this wasn’t just a quarter-over-quarter blip. Tesla delivered fewer cars than the first quarter of 2023 — the first year-over-year drop in sales in three years.

Tesla’s Q4 results show a company already grappling with shrinking profit margins due to its price-cutting strategy, rising costs of its Cybertruck production launch and other R&D expenses.

The automaker reported net income, on a GAAP basis, of $7.9 billion in the fourth quarter — an outsized number caused by a one-time, non-cash tax benefit of $5.9 billion. The company’s operating income and its earnings on an adjusted basis provided a clearer picture of its financial performance.

Tesla reported operating income of $2.06 billion in the fourth quarter, a 47% decrease from the same year-ago period. On an adjusted basis, the company earned $3.9 billion, a 27% drop from the same period last year.

The question is whether Tesla can prevent that profit pie from shrinking to profit muffin.

Since Tesla reported its Q1 2024 production and delivery numbers, the company has continued to pull various financial levers aimed at attracting new buyers and inducing existing customers to pay for FSD — all while reducing costs and maintaining profit margins.

Those opposing goals coupled with Musk’s “wartime CEO mode” status are bound to make the Q1 earnings call entertaining. Beyond that potential theater, there are pressing long-term questions about how Tesla delivers on autonomy and if it will be enough to convince investors that it can still lead and innovate.

Software Development in Sri Lanka

Robotic Automations

Tesla earnings week spotlights price cuts, Elon's 'balls to the wall' autonomy push | TechCrunch

April 23, 2024 1:10 AM0

As Tesla gears up to report what will likely be unimpressive financial results for the first quarter on Tuesday, the company is making more moves to go “balls to the wall for autonomy,” as CEO Elon Musk put it last week in a post on X.

Over the weekend, Tesla dropped the price of its Full Self-Driving (FSD) advanced driver assistance system to $8,000, down from $12,000. That price cut is in addition to last week’s drop of the FSD monthly subscription to $99, from $199. The push to get FSD into more cars could be a bid to collect more data as Tesla works to boost the neural networks that will power fuller-scale autonomy. FSD today can perform many driving tasks in cities and on highways, but still requires a human to remain alert with their hands on the wheel in case the system requires a takeover.

Earlier this month, Musk abruptly announced on X that Tesla was pausing the development of its $25,000 electric vehicle in favor of a robotaxi that he promised to reveal in August. Sources within Tesla have confirmed to TechCrunch that they didn’t have prior warning from Musk on this sudden shift, and that internal restructurings reflect a new ethos that puts robotaxi development at front and center.

All of this is happening as Tesla zigzags on its EV pricing strategy.

Last week, Tesla ditched EV inventory price discounts, but over the weekend slashed prices on Model 3 and Model Ys by as much as $2,000 in the U.S., China and Germany. As we saw during the first quarter of 2023, those price cuts are taking their toll on Tesla’s income and margins.

Tesla is scheduled to report earnings after markets close April 23. Musk has previously said that without autonomy, Tesla is “basically worth zero.”

The company will need to convince investors tomorrow that its shift in priority to autonomous vehicles is a silver lining in the cloud of declining margins, rather than just smoke and mirrors.

Since Musk laid off staff and announced that Tesla would be going hard on autonomy, Tesla’s share price has dropped almost 10%. Shares have fallen over 42% since the start of the year.

What to expect at Tesla’s Q1 2024 earnings

Tesla’s lower first-quarter delivery figures combined with price cuts are ingredients for a smaller profit pie. And analysts seem to agree.

Analysts polled by Yahoo Finance expect a profit of $0.48 per share on 20.94 billion in revenue. As a reminder, Tesla generated $25.17 billion revenue in Q4 and $23.3 billion in the first quarter of 2023.

Tesla delivered 386,810 vehicles in the first quarter of 2024, down 20% from the 484,507 it delivered in the final quarter of 2023. It’s worth noting that this wasn’t just a quarter over quarter blip. Tesla delivered fewer cars than the first quarter of 2023 — the first year-over-year drop in sales in three years.

Tesla’s Q4 results showed a company already grappling with shrinking profit margins due to its price cutting strategy, rising costs of its Cybertruck production launch and other R&D expenses.

The automaker reported net income, on a GAAP basis, of $7.9 billion in the fourth quarter — an outsized number caused by a one-time non-cash tax benefit of $5.9 billion. The company’s operating income and its earnings on an adjusted basis provided a clearer picture of its financial performance.

The question is whether Tesla can prevent that profit pie from shrinking to profit muffin.

Software Development in Sri Lanka

Tag: Tesla

Tesla profits tumble, Fisker flatlines, and California cities battle for control of AVs | TechCrunch

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