It is a classic move by Elon Musk. Tesla released some pretty grim first-quarter numbers showing its net income on Tuesday decreased by more than 50% from last year. However, during the earnings announcement, Musk presented his “new” vision for the electric car company. Tesla is now focused on building an AI-powered fleet of ride-hailing robotaxis, consisting of new and existing “cybercabs.” autonomous cars which Tesla owners can send as they wish.
“Think of it as a combination of Airbnb and Uber,” Musk told Tesla Results call Tuesday. “There will be a number of cars that Tesla itself owns and operates in the fleet, and then there will be a number of cars that are owned by the end user.”
When things go south, Musk is betting that his companies will build something no one has done before. Elon wants to build a robotaxi fleet so that Teslas spend as little time as possible in a garage. Tesla owners can enroll their cars in a ride-sharing robotaxi program that will presumably allow them to make money. Like Airbnb, owners can only rent their car to users with good reviews or only to friends and family. According to Musk, Tesla will operate this fleet, which includes a new dedicated robotaxi that will be unveiled in August this year.
If this sounds familiar, it’s because Musk has been talking about this fleet of robotaxis for years. Back in 2019, he said this would be the case More than a million of these autonomous cars will pick up strangers in 2020. Yes, that didn’t happen.
The robotaxis are still part of Musk’s vision for Tesla as an AI and robotics company. The CEO, who is often optimistic about his timelines, expects Tesla’s humanoid robot Optimus to be available for external sale by 2025. Musk reiterated that when Optimus is launched, it will be “more valuable than everything else combined.”
Tesla attributes its weak performance in the first quarter of 2024 to various factors. In his quarterly update, Management pointed to the Red Sea conflict, the arson attack on the Gigafactory Berlin and the gradual introduction of the updated Model 3 in Fremont. Broadly speaking, Tesla also noted the decline in global electric vehicle sales as many American competitors withdrew from the electric vehicle race last year.
Musk is betting the company on autonomous driving after a year of struggles for Tesla’s autonomous driving division. The California DMV sued Tesla this year over claimed its vehicles could drive fully autonomously in marketing materials, although this is not yet the case. Tesla recently issued over-the-air vehicle updates that included a disclaimer Drivers still have to be careful while using “Autopilot” mode.
Musk also announced that new, affordable Tesla models will be released in early 2025. These cars will be built on existing production lines, which Tesla says will reduce construction costs. However, this raises the question of how different these cars will be from existing Teslas. Musk dodged an analyst’s question when asked to elaborate on these new vehicles.
“Elon Musk finally emerged as the adult in the room, laying the foundation for Tesla’s growth strategy, most notably with a lower-cost vehicle now slated for production and delivery in 2025,” Wedbush Securities analyst Dan Ives said in an analyst note seen by Gizmodo on Wednesday.
Tesla shares were up 14% as of 10:20 a.m. in New York on Wednesday morning, despite weak first-quarter performance. Investors were excited by the prospect of new, cheaper models reportedly now entering production, as well as Musk’s vision of an AI-powered future. Not to mention that Tesla has announced plans to do so around 6,000 employees were laid off in Texas and California on Tuesday. That doesn’t hurt the stock price, but it could impact Tesla’s ability to execute on these bold visions.