Tesla, the American electric vehicle (EV) company, reported underwhelming results for the second consecutive quarter, but CEO Elon Musk appears to be focusing on the development of autonomous taxis and robots. Amid a decline in EV demand, supply chain disruptions due to U.S.-China tensions, and the departure of key personnel within the organization, Musk's singular focus on securing so-called 'future technologies' has raised concerns among investors.
On the 3rd (local time), The Wall Street Journal (WSJ) reported that Tesla recorded global vehicle deliveries of 444,000 units in the second quarter. This marks a 13.5% decrease compared to the same period last year, following a double-digit decline in the first quarter (13%). The recovery in gas vehicle demand supported by the potential reduction of EV tax credits in the U.S. and new vehicle launches from competitors like Hyundai and Ford are believed to have contributed to Tesla's declining performance.
Tesla's EV business is rapidly shrinking. The net profit in the first quarter plunged by 71% compared to the previous year, and it is interpreted that the company barely avoided turning to a loss due to $595 million (about 812.1 billion won) in revenue from carbon credit sales. According to market research firm Cox Automotive, overall EV sales in the U.S. decreased by about 7% in the second quarter, indicating a contraction.
The second quarter results, scheduled for release on the 23rd, are not expected to show significant improvement either. According to the WSJ, the market forecasts that Tesla's revenue could decrease by around 10% and its net profit by nearly 20%. Adam Jonas, a Morgan Stanley analyst, noted in a May report that 'the core value of Tesla's EV business is estimated to be between $50 and $100 per share,' adding that 'the current share price, approaching $300, is ultimately supported by expectations surrounding robots and autonomous driving technology.'
In fact, Musk appears to be placing greater emphasis on developing autonomous taxi and humanoid robot technologies over improving EV performance. The development project for the affordable electric vehicle 'Model 2,' priced at $25,000 (about 34.12 million won), has effectively been halted, while the fully autonomous taxi 'CyberCab,' which lacks a steering wheel and pedals, has risen to a higher priority. The CyberCab is the only new vehicle model Tesla has launched in the last five years, with less than 40,000 units sold in 2014, falling far short of the annual target of 250,000 units.
Nonetheless, Musk continues to assert that new technologies will emerge as a core revenue stream for Tesla in the future. In April, he proclaimed to investors that 'we must look beyond the bumpy and pothole-ridden road,' indicating his determination to ramp up new technology development despite the current poor performance.
However, the environment surrounding Tesla is challenging. First, there are concerning signals within the organization. Omid Afshar, who oversaw production and sales in North America and Europe, recently left the company, and Milan Kovac, who led Tesla's humanoid robot 'Optimus' project, also chose to resign for personal reasons. Furthermore, the increasing uncertainty over rare earth supply due to trade tensions between the U.S. and China raises a possibility of disruptions in the domestic supply chain centered around Canada and Mexico that Tesla operates.
Additionally, Musk's political remarks are posing risks to the Tesla brand. For instance, he recently criticized the large tax cut bill announced by U.S. President Donald Trump, referring to it as 'a road to financial ruin.' Trump strongly reacted, stating he could 'expel' Musk. If political disputes continue, damage to Tesla's image seems inevitable.
Despite various concerns, Musk is pushing his direction forward. On the 22nd of last month, Tesla launched its first commercial service for the CyberCab in Austin, Texas, and Musk even held a simple internal event to celebrate this with employees.
He stated, 'By 2026, hundreds of thousands of Tesla vehicles will be driving on the roads with full autonomy,' revealing his ambition to catch up with Waymo, the robo-taxi service operated by Google's parent company, Alphabet.
The recent ESG (environmental, social, and governance) report published by Tesla also directly reveals the focus on autonomous vehicles and humanoid robots. The report depicts a future city where autonomous vehicles traverse solar-powered urban areas and robots push strollers and carry groceries, visualizing the commercialization of future technologies.
However, it remains to be seen whether Musk's vision can dispel the concerns of poor immediate performance and uncertainty. On the 3rd (Eastern Time), Tesla's stock price recorded a slight drop of 0.10% to $315.35, even as the S&P 500 and Nasdaq set new all-time highs once again.