With a snap of Musk's fingers, Tesla surged by 400 billion.

In order to boost the stock price, Musk directly made a bold move.

The cheaper car model not only has not been abandoned, but will also be "accelerated for release". The originally planned production schedule for the second half of 2025 may be advanced to early 2025 or even the end of 2024.

After Musk's announcement, the capital market was shaken, and the stock price soared, jumping 13% after hours on the same day.

Based on the market value at the close of the day (460.8 billion US dollars), Tesla surged nearly 60 billion US dollars (about 433.9 billion RMB) in a single day.

This major news also selectively made the market turn a deaf ear, not caring at all about the data in Tesla's financial report that did not meet expectations.

In the first quarter of 2024, Tesla achieved a revenue of $21.301 billion, a year-on-year decrease of 9%; net profit was $1.129 billion, a year-on-year decrease of 55.07%; and deliveries were 386,810 vehicles, a year-on-year decrease of nearly 9%. All these key data were lower than the expectations of Wall Street analysts.

However, many people believe that as long as Tesla continues to launch low-priced cars, they are starting to have some expectations, even if the financial report shows less than impressive numbers.

01 Autonomous driving is the right path

"Even if I were abducted by aliens, Tesla must solve the problem of autonomous driving."

Musk's statement at the earnings call once again reaffirmed Tesla's original intention. In addition, the release of news such as the price reduction of FSD, the launch of Robotaxi, and the use of 85,000 Nvidia H100 GPUs for training artificial intelligence also revealed Musk's obsession and determination for fully autonomous driving cars.

FSD will be licensed to a major carmaker

Musk stated during the call that those who view Tesla as a traditional car manufacturer are completely mistaken. Tesla is essentially an artificial intelligence company dedicated to injecting "intelligence" into every car. In terms of the external licensing of FSD (fully autonomous driving), Tesla has also made new progress, stating that it is discussing cooperation with a large carmaker regarding Robotaxi. However, Musk mentioned that specific information will have to wait until the Robotaxi launch event on August 8.

In Musk's grand blueprint, electric vehicles must achieve autonomous driving. In his view, driving traditional fuel cars will become as outdated as traveling by horse and using flip phones.

Musk and other executives at Tesla also mentioned that the company will focus more on the research and development of autonomous driving technology, with the long-term goal of putting 5 to 7 million autonomous vehicles on the road. Tesla has a range of models that can provide valuable performance predictions for FSD in future iterations, and several states in the United States have already begun to accept autonomous vehicles.

In addition, the design work for Tesla's fifth-generation autonomous driving chip, Hardware 5, has been largely completed, and it is expected to be installed in vehicles by the end of 2025.

According to Siena Capital automotive analyst Chris Redl, Tesla obtained deferred revenue of up to $700 million from FSD in the first quarter of this year, which is roughly equivalent to 4.3% of Tesla's automotive revenue after excluding regulatory credits. According to the financial report, FSD not only increased per-vehicle sales revenue, but also raised per-vehicle gross margin.

Although it still cannot offset the billions of dollars Tesla spent on automatic research and development this year, at least they are seeing a return on investment.

Affordable models are being accelerated for release.

It's really no wonder that Musk always criticizes Reuters as "big liars."

During the recent earnings call, Musk explicitly stated that the new affordable model will be released as planned, and may even be accelerated.

"We have updated the product line for future vehicles, and we will accelerate the launch of new models before the previously mentioned production date in the second half of 2025, including more affordable models." The new models may be unveiled as early as the beginning of 2025 or even the end of 2024.

In early April, foreign media reported that Tesla's senior management secretly canceled the development plan for the affordable "Model 2" in February without informing employees and suppliers, and instead shifted focus to developing the new Robotaxi model. At the time, Musk promptly refuted the news as fake on the social network X.

Musk's clear spoiler about the new car model is also a counterattack against the previous media revelations.

Robotaxi cannot be overlooked

In addition to going all in on autonomous driving, Musk devoted more space to describing the future of Tesla's Robotaxi network.

During the financial report meeting, Musk confirmed that Tesla will launch the unmanned taxi (Robotaxi) on August 8, 2024.

As early as 2016, Musk had said that the number of autonomous vehicles in the future will exceed the number of human-driven vehicles. If Tesla cannot achieve fully autonomous driving, its "value is basically zero."

In the same year, the concept of Tesla's unmanned taxi (Robotaxi) was proposed. In a Musk biography published in September last year, Musk revealed that the Robotaxi is built on a new Tesla platform and will be equipped with a steering wheel and pedals.

According to the statements at the financial report meeting, Tesla's Robotaxi has completed the engineering design and will be able to achieve large-scale production capacity upon its launch.

Tesla also stated that the Robotaxi will still adopt a new "unboxing" process, with Tesla being responsible for operating this fleet of vehicles. Additionally, Tesla's robot taxi fleet will integrate the business models of Airbnb and Uber.

Musk even used Airbnb as an analogy, stating that vehicle owners joining the Tesla Robotaxi network can decide when to use their own vehicles and when to add their vehicles to the autonomous driving network to make money.

One more thing

In addition to the financial report meeting, Tesla also brought a surprise to the domestic market that day.

In the early morning of April 24th, Beijing time, Tesla quietly launched its new compact sedan, the Model 3 Performance, and began accepting pre-orders simultaneously.

Compared with the old P version, the appearance and performance of the new car have been adjusted. For example, front lip and rear spoiler have been added, reducing drag by 5%, reducing lift by 36%, and improving front and rear lift balance by 55%. The new high-performance version is also equipped with larger brake calipers.

Performance has also been greatly improved, with the new Tesla fourth-generation drive unit, continuous power increased by 22%, peak power increased by 32%, peak torque increased by 16%, and a range of 296 miles (about 476 kilometers). Musk also claimed that the car's speed can exceed that of a Porsche 911.

According to the Tesla official website, the new Model 3 high-performance version is priced at $52,990 (about 383,900 RMB), and the estimated delivery time for orders in North America is from May to June this year.

It is worth mentioning that, although the high-performance version of the Model 3 is priced at more than $5,000 higher than the long-range version, according to the current U.S. electric vehicle subsidy policy, the high-performance version is eligible for a full $7,500 tax credit, making the new model actually $2,000 cheaper.

Perhaps even Musk himself has not noticed this hidden benefit, and jokingly mentioned to netizens that the U.S. electric vehicle subsidy policy also applies to leasing, so renting a long-range Model 3 would still be cheaper than the high-performance version.

02 Maximum Decline, Performance Below Expectations

Now let's review Tesla's performance in the first quarter of 2024.

The total revenue for the first quarter was $21.3 billion, slightly lower than the market's previous expectation of $22.3 billion, a 9% decrease compared to the same period last year's $23.329 billion, and a more than 15% decrease from the fourth quarter of last year's $25.17 billion; it is the first year-on-year decline in nearly four years and the largest decline since 2012.

Due to Tesla's continued price reduction strategy and comprehensive initiatives such as All in AI, the impact on the profit side directly resulted in a halving of net profit. Tesla's net profit in the first quarter was $1.1 billion, a 55% decrease compared to the market's original expectation of $1.81 billion.

Adjusted earnings per share for the first quarter were $0.45, also lower than analysts' expected $0.52, showing a sequential and year-on-year decline from $0.71 in the previous quarter and $0.85 in the same period last year. The operating profit margin further decreased from 8.2% in the fourth quarter of last year to 5.5%, hitting a new low.

Of course, the decline in profit is also related to increased spending. Tesla's capital expenditures in the first quarter increased to $2.77 billion, a 34% year-on-year increase. The first quarter's cash flow was negative $2.5 billion, and cash and cash equivalents and investments at the end of the quarter decreased by $2.2 billion compared to the previous quarter.

However, from the information revealed in the financial report, it can be seen that Tesla's investment focus is still primarily on autonomous driving technology. In the first quarter, Tesla's investment in AI infrastructure reached $1 billion.

In these months, Tesla's computing power has experienced exponential growth, laying the foundation for FSD's bi-weekly updates and upgrades.

In the first quarter of this year, Tesla's total vehicle production was 430,000 units, with global deliveries reaching 386,800 units, significantly lower than the previous institutional forecast of around 430,000 units, a year-on-year decrease of 8.3% and a quarter-on-quarter decrease of as much as 20.1%. At the same time, this is also the first quarterly year-on-year decrease in Tesla's delivery volume since 2020, and it is also the worst single-quarter sales performance since 2022.

Elon Musk said that many other car manufacturers are reducing their investment in EVs and turning to the production of plug-in hybrid cars. In other words, the decline in demand for electric cars is also one of the main reasons for the drop in sales. However, Musk believes that this is the wrong strategy and that electric cars will eventually dominate the market.

The decline in sales also directly affected Tesla's automotive business revenue, which fell by 13% to $17.34 billion year-on-year.

However, it is worth mentioning that the revenue of the energy production and storage department increased by 7% to $1.64 billion year-on-year. Service and other business receivables reached $2.288 billion, an increase of 25% year-on-year.

Despite the successive price cuts of Tesla models, the overall gross margin of Tesla still maintained at 17.4%, which is basically flat compared to the previous quarter, but this data exceeded analysts' expectations of 16.5%.

However, Tesla reiterated its pessimistic outlook for 2024, stating that it is currently in a "platform period" between two major growth waves, and it is expected that the sales growth rate in 2024 will significantly decrease compared to 2023, despite accelerating the launch speed of new models.

Since 2024 is not looking good, it all depends on how the low-cost cars perform next year.