Elon Musk, Chief Executive Officer (CEO) of Tesla Motors, makes multiple promises to investors, as the electric vehicle (EV) manufacturer saw its first-quarter net income plummet by 55%, in results released on April 23, 2024, as reported by AP.

However, the stock shot up 11% in the hours following the announcement by CEO Elon Musk of intentions to speed up the manufacture of new, more reasonably priced cars, according to the newspaper. Notably, Tesla has experienced a difficult year—its stock has dropped by more than 40% since the year's start. This gain coincides with the company's struggles.

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On April 23, Tesla said in a letter to investors that it will start producing more compact, less expensive models sooner than planned. These cars will employ next-generation vehicle foundations and combine features from existing models, including the highly anticipated Model 2 tiny car, which is predicted to cost about $25,000. This information was revealed by AP. No new facilities or significant production line extensions will be required because these models will be produced on the current manufacturing lines.

“This update may result in achieving less cost reduction than previously expected but enables us to prudently grow our vehicle volumes in a more capex efficient manner during uncertain times," the investor letter said.

Tesla reported $1.13 billion in earnings from January to March, a sharp decrease from the $2.51 billion it posted during the same time the previous year. With $21.3 billion in revenue for the first quarter, the company's revenue for the prior year decreased by 9%. The decrease in demand for electric vehicles around the globe was ascribed to heightened competition.

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Musk stated on a conference call with analysts that the smaller models should start to be produced by the end of this year or maybe in the second half of next year. Musk expressed optimism about exceeding last year's vehicle sales number of 1.8 million units while giving little information about the new cars and whether or not they would be variations of current models, according to the AP story.

Musk said he expects production to start in the second half of next year “if not late this year", adding that "New factories or massive new production lines won't be needed for the new vehicles." On specifics, Musk said they've "said all we will on that front".

Bloomberg reported that Musk made critical remarks about its competitors: General Motors Co. and Ford Motor Co., being responsible of the decrease in EV production, to focus on revitalizing their gas-electric hybrid offerings. The paper also stated that Tesla's approach has remained ambiguous for most of 2024. It has lowered costs across the board over the last year to stimulate sales, but this hasn't raised demand for its cars.

“The EV adoption rate globally is under pressure and a lot of other auto manufacturers are pulling back on EVs and pursuing plug-in hybrids instead. This is not the right strategy," he said.

According to same report, Musk made a clear announcement to investors during Tesla's first-quarter results call: the firm is now turning into an artificial intelligence (AI) company. Musk emphasized the company's AI and autonomous vehicle efforts throughout the call, describing a future in which Tesla runs a fleet of millions of EVs as robotaxis, similar to well-known ride-hailing services like Uber Technologies Inc.

One of Tesla's future objectives is to enable customers to rent out their Tesla cars for rides, following the business model of home-sharing website Airbnb Inc.

Musk emphasized Tesla's commitment to solving autonomy, stating, “If somebody doesn’t believe Tesla is going solve autonomy, I think they should not be an investor in the company. But we will. And we are."

Tesla stated in its investor presentation papers that it is developing a robotaxi specifically, and that further information would be released in August. To cut assembly costs in half, the business said that it will use a novel "unboxed" manufacturing strategy for the robotaxi.

“Our purpose-built robotaxi product will continue to pursue a revolutionary ‘unboxed’ manufacturing strategy," Tesla said, referring to its planned new vehicle production system intended to slash assembly costs in half.

According to Reuters, Musk stated that while Optimus, Tesla's humanoid robot, is still in the research stage, it may be on sale by the end of the next year.

Many industries, including manufacturing, shipping, warehousing, and retail, have taken notice of the development of humanoid robots because they may fill labor shortages and do dangerous or monotonous activities, it continued.

Musk during the investor call said he anticipates Optimus to be operational in Tesla's factories by the close of this year. "I think Tesla is best positioned of any humanoid robot maker to be able to reach volume production with efficient inference on the robot itself," Musk said on the call, referring to AI abilities.

Musk stated that he was certain Tesla could produce humanoid robots in large quantities and that this would play a big role in the company's future operations.

By revealing talks with another carmaker about the licensing of its Full Self Driving (FSD) features, Musk also alluded to Tesla's possible entry into the self-driving space. Modern driver-aid software now mandates that drivers stay focused and keep their hands on the wheel.

Musk urged investors to experience FSD firsthand, stating, “I once again would just likely strongly recommend that anyone, who is I guess thinking about the Tesla stock, should really drive (FSD’s latest version). It is impossible to understand the company if you do not do this."

The gross profit margin of the corporation experienced a decrease to 17.4% from 19.3% in the previous year. Tesla has also faced obstacles in its pursuit of autonomous driving since safety concerns have led to recalls for its FSD technology.

Notwithstanding the bright future, Tesla still has obstacles to overcome, such as preserving profitability and resolving issues with its autonomous driving technology.

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