Tesla fell short of Wall Street’s expectations in its first-quarter earnings report released on Tuesday, highlighting the challenges facing the electric vehicle (EV) market amid dwindling sales and sector uncertainty. During the earnings call, the company aimed to address investor concerns stemming from what has proven to be a weak quarter.
CEO Elon Musk announced plans to reduce his involvement with the White House’s DOGE office, noting, “Starting next month, I will be allocating far more of my time to Tesla,” as he feels the essential work of establishing the Department of Government Efficiency is mostly complete. He mentioned he would still dedicate one or two days a week to government matters, contingent on President Trump’s wishes.
Musk shared updates on an eagerly awaited, more affordable Tesla model along with the timeline for the company’s robotaxi service rollout. Here are the five key takeaways from the call:
1. Musk to Step Back from DOGE Involvement
Musk revealed his intention to significantly reduce his role at the DOGE office to focus on Tesla. Although he didn’t elaborate on how this might have affected Tesla’s reputation, CFO Vaibhav Taneja acknowledged incidents of vandalism and negative sentiment towards the brand, which he said have impacted certain markets.
2. Robotaxi Service Launch Details
Tesla plans to launch its long-anticipated robotaxi service in Austin this June, beginning with “maybe 10 to 20 vehicles.” Musk indicated that operations would quickly expand thereafter while confirming that remote human operators would be available to assist vehicles that encounter issues during the initial rollout. The aim is to extend the service to other U.S. cities by year-end, with projections for millions of Teslas operating fully autonomously by the latter half of next year. Musk also highlighted the advantageous cost of Tesla’s cars in comparison to competitors like Waymo, stating he does not see significant competition in this arena right now.
3. Development of a More Affordable Tesla Model
Tesla has faced pressure from investors to create a more budget-friendly vehicle, which could open up a larger customer base. The company confirmed that production plans for these new models are still on track for the first half of 2025. Economic uncertainty stemming from evolving trade policies underscores the importance of introducing affordable options, according to the company’s leadership.
4. Resilience Against Tariffs
Musk expressed confidence that Tesla would be the least affected automaker concerning tariffs, attributable to the company’s long-standing efforts to localize its supply chains in America, Europe, and China. While he acknowledged that high tariffs can pose challenges, he affirmed his support for predictable and lower tariffs.
5. Stock Movement After Earnings Call
Following the earnings call, Tesla stock rose more than 5% in after-hours trading. Analysts believe that grounding their projections on operational developments such as the introduction of the affordable model and the robotaxi service will be crucial for the company’s stock trajectory. Despite this positive momentum, ongoing sales declines coupled with tariff pressures could pose risks to Tesla’s profit margins.
As the market closely watches Tesla’s maneuvers in a challenging economic landscape, the attention on upcoming product developments remains key to the company’s future success.