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As the debate over whether Tesla should be valued as an automaker or a software company rages, CEO Elon Musk laid out his view in no uncertain terms.
“If you value Tesla as just an auto company, fundamentally, it's just the wrong framework,” Musk said during Tesla’s first quarter earnings call on Tuesday.
Musk’s comments came during a critical moment for Tesla. Heading into the earnings announcement, Tesla faced mounting pressure from investors over its future. Investors were especially concerned that Tesla might scrap plans for a new, more affordably priced car altogether given that Musk had repeatedly telegraphed his intentions to turn much of Tesla’s resources toward robotaxis and self-driving car technology. Investors have balked at the idea that a car company with declining sales would delay the release of its new model in favor of developing a technology that does not exist yet.
Instead, Tesla split the difference. It moved up the production schedule of its new models from late 2025 to early 2025, with a possibility they may even arrive by the end of this year, according to Musk. While at the same time making crystal clear that the investment thesis for the company should be entirely focused on its tech endeavors.
“If somebody doesn't believe Tesla is going to solve autonomy, they should not be an investor in the company,” Musk said.
When asked if the company could develop self-driving cars without him, Musk was confident the work was close to completion. “Even if I’m kidnapped by aliens tomorrow, Tesla will solve autonomy, maybe slower, but for vehicles at least,” he said.
A bad quarter for Tesla
However, the down-the-middle strategy Tesla opted for belied what was a particularly high-stakes earnings call given how poorly the company performed. Investors and analysts had already been primed to expect a historically bad quarter from Tesla—which it was.
Earlier this month, Tesla released figures that showed its vehicle deliveries were down 8.5% in the first quarter, its first year-over-year decline in four years. As earnings reports showed, those poor numbers trickled down to the rest of Tesla’s business. Revenue slid 9%, the largest decline since 2012, for a total of $21 billion in the first quarter, according to an earnings release. Total vehicle sales were down 13% compared to the year before. Net income didn’t fare much better, dropping 55%, as the company brought in $1.1 billion in the quarter.
Perhaps the one silver lining for investors was that Tesla announced it would speed up the production of its upcoming cars. Investors had been eagerly awaiting further news from Tesla leadership about when new models would hit the market after a report the company was scrapping them entirely in favor of its robotaxi efforts. The new model, rumored to be an affordable car priced under $30,000, is still in the works.