Electric vehicle (EV) maker Tesla cautioned that its sales growth on electric vehicles could be impacted until cheaper vehicle options are made available by the company.
In recent years, the company experienced notable growth as it expanded production and deliveries of its Model Y and Model 3 vehicles. But despite an increase in overall revenue, the company failed to achieve forecasted estimates from analysts in the fourth quarter, causing shares to fall.
“Our company is currently between two major growth waves,” said Tesla, but according to CEO Elon Musk the situation is hard to predict.
“We don’t have a crystal ball so it’s difficult to predict with precision. If interest rates come down quickly, margins will be good and if they don’t, they won’t be that good,” he said during a call with investors and analysts.
According to the company, there are plans in the pipeline that would offer an upcoming next-generation vehicle, which would surpass its current fleet that has proven very successful over the years.
“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 at Gigafactory Texas,” the company said.
After establishing a factory in Austin, the company will build the new vehicles at a new plant to be constructed in Mexico, according to Mr. Musk.
While the company reported net profits of nearly $8 billion in the fourth quarter, this was boosted by a one-time tax-related matter of nearly $6 billion, without which the company would have seen an almost 40 percent drop in profits from the year before.
Mr. Musk said on Jan. 24 that production on Tesla’s next-generation vehicle, expected to be the company’s most affordable model yet, will likely commence in late 2025, adding that he is “often optimistic regarding time.”
“Revolutionary manufacturing techniques that require innovative equipment will require engineers to be living on the [assembly] line,” he added.
Meanwhile, Tesla had a rocky start to 2024, fuelled by concerns relating to supply and demand, which saw shares drop by more than 16 percent. The company is also faced with a heavy financial burden as it is working to improve its Cybertruck pickup vehicle, which according to Mr. Musk, will likely hit a few more snags before a noticeable boost in production.
The Tesla CEO previously expressed on his social media platform X that he is seeking to gain at least a 25 percent stake in the EV company, motivated by concerns that “some random shareholder advisory firm could vote him out.”
Mr. Musk said the stake would be enough for him to have a significant influence without being fully in control of the company.
In exchange for this, he would develop artificial intelligence (AI) products for the EV manufacturer, but asserted he would be pursuing AI initiatives elsewhere, if the increase in stake doesn’t materialize.
“I see a path to creating an artificial intelligence and robotics juggernaut of truly immense capability and power,” Mr. Musk said.
Mr. Musk sold large amounts of Tesla shares to finance the acquisition of Twitter, now X, which he purchased in 2022 for $44 billion, leaving him with a mere 13 percent of shares.
Moreover, Mr. Musk said that he has engaged in some tentative conversations with other car manufacturers regarding their licensed use of Tesla’s “full self-driving” system, but that so far nothing had come out of the talks.
“I think they don’t believe it’s real quite yet. I think that will become obvious probably this year,” Mr. Musk said.
Tesla’s “full self-driving” hardware went on sale late in 2015, and Mr. Musk has used the name ever since.
In 2019, Mr. Musk promised a fleet of autonomous robotaxis by 2020, and he said in early 2022 that the cars would be autonomous that year. In April, Mr. Musk said the system should be ready in 2023.
The Associated Press contributed to this article
