Tesla's performance has exploded!
Tesla's Q1 2024 financial report released after hours on Tuesday local time showed a 9% year-on-year decline in revenue, the largest decline in 12 years, and a significant 55% year-on-year decrease in net profit. All key indicators in the financial report were lower than expected.
It is worth noting that Tesla CEO Musk announced that he will accelerate the launch of cheaper affordable models, and the stock price surged by over 13% after hours. Since the beginning of this year, Tesla's stock price has fallen by over 40%, with a total market value evaporating over 320 billion US dollars (approximately 2.3 trillion yuan).
Tesla's performance has changed significantly
All key indicators are below expectations
The financial report shows that Tesla's revenue in the first quarter fell 9% year on year to $21.3 billion, lower than the market's expectation of $22.3 billion. This is the first year-on-year decline in nearly four years since the COVID-19 disrupted operations in the second quarter of 2020, and the largest decline since 2012, with a month on month decline of more than 15% compared with the $25.17 billion in the fourth quarter of last year, mainly due to the slowdown in global demand for electric vehicles.
The free cash flow for the first quarter was negative $2.5 billion, resulting in a decrease of $2.2 billion in cash, equivalents, and investments at the end of the quarter compared to the previous quarter. This was mainly due to an increase of $2.7 billion in inventory and $1 billion in capital expenditures on artificial intelligence infrastructure, which will continue to increase core AI infrastructure capabilities in the coming months.
Tesla Financial Report
At the shareholder meeting, Tesla reiterated its pessimistic outlook for 2024 and informed investors that "the sales growth rate may be significantly lower than the growth rate in 2023.".
Compared to the same period last year, Tesla's energy division's revenue increased by 7% to $1.64 billion, while services and other revenue increased by 25% to $2.29 billion.
Tesla Financial Report
The sales growth of electric vehicles is slowing down, and Tesla and its major competitors have been intermittently and significantly reducing electric vehicle prices for months to stimulate demand. Tesla's gross profit plummeted by 18% in the first quarter, partly due to price cuts at the beginning of the year. Net profit decreased significantly by 55% year-on-year.
Tesla stated that its total sales include revenue from early sales of its advanced driving assistance system, known as the Fully Automated Driving (FSD) option. A feature called Autopark has been released in North America, enabling the company to recognize deferred income.
Siena Capital automotive analyst Chris Redl estimates that Tesla received up to $700 million in deferred income from FSD this quarter. Excluding regulatory credit, this is approximately 4.3% of Tesla's revenue.
Tesla began a large-scale restructuring this month, with two executives Drew Baglino and Rohan Patel resigning. Last week, Musk stated in a company wide memo that Tesla will lay off more than 10% of its workforce, which will involve at least 14000 people.
Tesla China launches "0 down payment" for car purchases
Musk: Cheap car models will be launched next year
After the explosive performance, Tesla urgently scaled up its strategy.
On the morning of April 24th, Tesla's official Weibo account announced the launch of a zero down payment promotion, applicable to models such as Model 3 and Model Y.
Just a few days ago, Tesla announced a price reduction. On April 21st, Tesla China's official website showed that the price of the updated Model 3 had dropped to 231900 yuan, a decrease of 5.7%; The price of the Model 3 Long Range Renewal has dropped to 271900 RMB, a decrease of 4.9%. The price of Model Y has dropped to 249900 yuan, the price of Model Y Long Range Edition has dropped to 290900 yuan, and the price of Model Y High Performance Edition has dropped to 354900 yuan. The selling price of Model S has dropped to 684900 RMB, and the selling price of Model S PLAID version has dropped to 814900 RMB. The selling price of Model X has dropped to RMB 724900, and the selling price of Model X PLAID version has dropped to RMB 824900. And all models Y, S, and X in the United States have recently seen price reductions across the board.
It is worth noting that during Tesla's earnings conference call, Musk clearly stated that the more cost-effective model, previously reported as the Model 2, is planned to be launched in the market in early 2025. Musk revealed that the new model will be manufactured on existing production lines without the need for a new factory, and the possibility of being launched on the market earlier is not ruled out.
In addition, Musk stated that by the end of this year, Tesla will have 85000 Nvidia H100 GPUs for training artificial intelligence. Musk stated that the Optimus humanoid robot may be sold before the end of 2025, and by the end of this year, the Optimus humanoid robot will have the ability to complete simple factory tasks.
Analysis suggests that Tesla invested $1 billion in AI computing in the first three months of this year, making it more like an AI company than a car company.
In addition, in the early morning of April 24th Beijing time, after several months of market rumors, explosive photos, and spoilers, Tesla finally released a new high-performance version of the Model 3 on the US official website, and began accepting reservations simultaneously.
(Tesla official website)
Compared to the previous generation Model 3 high-performance version, the new version has a 32% increase in peak power, a 16% increase in peak torque, and a 5% reduction in drag. Like the previous generation, the new high-performance version is also equipped with larger brake calipers to control more powerful cars.
According to Tesla's official website, the new Model 3 high-performance version is priced at $529900 (approximately RMB 383900) and has a range of 296 miles (approximately 476 kilometers). According to the official website of the United States, it is currently scheduled to be picked up around May June.
Although the initial focus of American netizens was still on the range of this car, it was quickly overshadowed by the hot discussion caused by the price - American netizens were surprised to find that due to the current electric vehicle subsidy policy in the United States, the new high-performance version is even cheaper than the standard long range version!
According to the original pricing, the high-performance version of the Model 3 ($52990) is more than $5000 higher than the long range version ($47740), but due to the former being able to receive a purchase tax credit policy of up to $7500, while the latter is now unable to receive subsidies, the high-performance version is actually $2000 cheaper.
Musk also expressed helplessly that the degree of evolution of the situation now far exceeds the possibility of changing the vast supply chain and production system. He also added to the confusion among netizens, stating that the preferential policies for electric vehicles in the United States are applicable to renting the Model 3 Long Range Edition, so the price of renting a Long Range Edition is still lower than that of the High Performance Edition.