Tesla CEO Elon Musk has promised another manufacturing revolution as the company gears up to release its “next-gen” EVs, including the long awaited low cost Tesla and the equally anticipated Robotaxi, but insists that Tesla should no longer be regarded as just a car company.
As expected, Tesla revealed its first fall in revenues for a decade and a steep fall in earnings in the first quarter, but investors actually responded by pushing the price up, cheered by news that Tesla is, after all, intending to roll out the much anticipated “Tesla 2” low cost EV, and the self-driving vehicles that Musk says will change the nature of transport and mobility.
As Riz Akhtar writes, Tesla says the company could – assuming demand is strong and consumers do not have their heads turned by hybrids, particularly in the US – reach three million sales in 2025, which would be a jump of more than 50 per dent on what is expected to be a subdued 2024, weighed down by EV indifference in the US and production hiccups elsewhere.
The “low cost” Tesla, however, might not be as low cost as some were expecting, because Tesla says it will roll out this model on existing production lines, which may result in achieving “less cost reduction than previously expected.”
But Musk really wanted to focus on other things in the investor call, and particularly another step change in manufacturing, robots and AI, and the Robotaxi that he says will be built with what he describes as the “unboxed” manufacturing strategy.
“This is a revolutionary manufacturing system, significantly far more advanced than any other major automotive manufacturing system in the world by a significant margin,” Musk said of the planned upgrade at the Texas gigafactory, which would then be rolled out to its other production facilities.
“We are building a machine that never existed to build a car that never existed.”
There were no further details of what the next-gen cars would actually be, or what they would loo like.
There had been concern in the market that the release of the so-called Tesla 2 could be indefinitely delayed, a nod to the fact that even Tesla can’t compete with low-cost Chinese manufacturers, but Musk indicated it was still planned and it could come at the start of 2025, rather than the end.
The key, however, will be on AI and Robotics, both in the products and the manufacturing line. Tesla is releasing more details on its proposed Robotaxi on August 8, is suggesting it may be selling its Optimus humanoid robot as early as 2025, and is also claiming huge advances in its Dojo computer systems and re-writing hundreds of thousands of lines of code.
“People think of Tesla as a car company, when they should be thinking of Tesla as an AI robotics company,” Musk said, insisting in the company’s prepared remarks that “the future is not only electric, but also autonomous.”
Many analysts have already observed that Tesla’s future is more than just a seller of cars, but a seller of mobility. Some put the worth of the traditional car sales business at a fraction of the overall company value, focusing instead on opportunities in energy storage, subscriptions, supercharging access and the Full Self Driving software.
Musk again flagged the potential of signing a deal with another major car company, which he declined to name, to adopt Tesla’s FSD. Many think it’s inevitable that other companies will do the same, because Tesla has more data and is further ahead than any competitor.
And there is also the energy division, which is doubling production capacity of its battery storage products to 40 gigawatt hours a year, and where Musk sees more growth than the car division to help create what he says will be the most valuable company in the world.
“Our company is currently between two major growth waves: the first one began with the global expansion of the Model
3/Y platform and we believe the next one will be initiated by advances in autonomy and introduction of new products,
including those built on our next generation vehicle platform,” the company said.
“In 2024, our vehicle volume growth rate may be notably lower than the growth rate achieved in 2023, as our teams work on the launch of the next generation vehicle and other products.
“In 2024, the growth rates of energy storage deployments and revenue in our Energy Generation and Storage business should outpace the Automotive business.”
Giles Parkinson is founder and editor of The Driven, and also edits and founded the Renew Economy and One Step Off The Grid web sites. He has been a journalist for nearly 40 years, is a former business and deputy editor of the Australian Financial Review, and owns a Tesla Model 3.