[Financial Summary] Tesla to introduce models cheaper than the biggest decline in sales in the past 12 years by early 25
Major US electric vehicle (EV) company $Tesla(TSLA.US$Financial results for the fiscal year ending January to March 2024 (1st quarter) were announced after local closing on the 23rd. Tesla's sales and profits fell short of expectations for 3 consecutive quarters, and sales fell for the first time in 4 years, the biggest drop in the past 12 years. Profits were sluggish, and free cash flow was negative for the first time since COVID-19. The company has repeated the pessimistic outlook that the growth in automobile sales volume this year will be “significantly lower,” but it is assumed that development of cheaper models will be accelerated and investment in AI will be strengthened as early as next year, and details will be announced on 8/8. Also, sales of the humanoid robot “Optimus (Optimus)” are expected by the end of next year.
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Despite the fact that sales and profits fell short of expectations, and the company maintained guidance on growth in automobile production and car deliveries in 2024 while “drastically lowered.”Policy to hasten the introduction of models that are easy to buyIt was revealed and “defeated” reports that development of the Model 2 was stopped a few days ago. Tesla's stock price is overtime trading13% at one timeIt has skyrocketed recently.
What are the plans for Tesla Model 2It will be the key to realizing Musk's sales growth ambitionsThe analyst pointed out. In 2020, he said Tesla aims to sell 20 million units by 2030, double the current level of Toyota, the world's largest car manufacturer.
In a telephone conference with analysts, Mr. Musk said, “I mentioned it beforeEarlier than the start of production in the latter half of '25The future vehicle lineup was updated in order to advance the introduction of new models. Therefore,End of this yearEven if it doesn't go so far,It will be 25 years earlyI anticipate that,” he said. He also said that by the end of 2025Start selling the humanoid robot “Optimus (Optimus)”I made an optimistic statement. What was the consensus assessment of Tesla by Wall Street analysts before financial results were announced“neutral”What is the target stock price175.67There is still room for growth in dollars compared to current stock prices.
Tesla's first quarterturnoverIs a 9% decrease compared to the same period last year213.01 billionThe dollar fell short of market expectations of 22.3 billion dollars. The biggest drop since 2012, aboutRevenue declined for the first time in 4 yearsIt became. According to analysts, the decline in sales in the first quarter exceeded the decline in 2020, which was due to production interruptions.
Price reduction strategies and investments in AITesla's profits continue to be squeezed in response to such initiatives.net profitIt was halved, down 55% from the same period last year to 1,144 billion dollars, which was lower than the market forecast of 1.9 billion dollars.Adjusted EPSwas $0.45, lower than analysts' expectations of $0.59.Operating profitIt was 1,171 billion dollars, down 56% from the same period last year, and the operating profit margin fell further from 8.2% in the same period last year to 5.5%.
Furthermore, the company'sCapital Expenses (CAPEX)It increased 34% from the same period last year to 2.77 billion dollars. What was the free cash flow for the first quarterminus 2.5 billion dollarsAs a result, cash, cash equivalents, and investments decreased by 2.2 billion dollars compared to the previous quarter.Inventory is inflated and capital expenditure of 1 billion dollars has been made on AI infrastructureIt became the main cause. Core AI infrastructure functions will continue to be added over the next few months.
Prior to that, since production of the Model 3 began in early 2017, the gross profit margin for the first quarter was expected to be at its lowest level in the past 7 years.Barclays and UBS SecuritiesFree cash flow “turns slightly negative”It is anticipated that this is the first quarterly negative cash since the early 2020s for the company, and an important period where it is investing a large amount of money in “robo-taxis” and new cheaper electric vehicles.
Vibe Hub Taneja Chief Financial Officer (CFO) stated in a telephone conference that the increase in inventory is a temporary setback, and “we anticipate that inventory accumulation will reverse in April-June (2nd quarter), and free cash flow will turn into a positive zone.”
Also,Automobile business salesIt was 17.38 billion dollars, down 13% from the same period last year.Energy business salesis 1.64 billion dollars, up 7% from the same period last year,gross profitAlong with a rapid increase of 140% from the same period last year, both recorded record highs,Energy storage system capacityhas reached 4.1 GWh,Sales of services and other servicesIt was 2.29 billion dollars, up 25% from the same period last year.
According to the guidance, Tesla”We are currently in a plateau between two major growth waves”. “The first growth wave began with Model 3/Y's global expansion,The next growth wave is progress in autonomous driving and introduction of new productsIt is expected to be caused by In 2024, in order to focus on introducing next-generation vehicles and other products,Growth rate of vehicle salesWhat is the growth rate for 2023There is a possibility that it will fall significantly below” he pointed out.
What should be noted is that TeslaMaintain starting production of the “new model” in late 2025Also, it is planned to accelerate the introduction of more affordable models and the robot taxi car “Robotaxi.”
Vehicles for the first quarter, according to financial resultsDecrease in average sales prices, through investments in artificial intelligence and battery improvements, and other research and development projectsIncrease in operating expensesThe cost of increasing production of the electric pickup truck “Cybertruck”, a decrease in the number of car deliveries, etc.Sluggish operating profitIt led to. However, vehicle costs have declined continuously compared to the previous quarter due to a decline in raw materials, freight rates, and tariffs, and also in North America“Autopark (Autopark)” functionDue to the addition, the recorded sales value of FSD has increased compared to the same period last year.
Also, according to analysts, Tesla will invest 1 billion dollars in AI calculations in the first 3 months of this year,An AI company rather than a car companyIt is said that it has become
Following sluggish car deliveries in the first quarter, personnel cuts, and Cybertruck recalls, investor concerns deepened further due to global price cuts over the weekend.
Wedbush said “the first quarter results and conference call are for Tesla and CEO Musk”A pivotal momentIt became”,There is a high possibility that stock prices will be significantly affected” he said.
Analysts say Tesla's stock price has been higher than current sales and profits for a long timeMass-marketed cars and FSDIt was pointed out that it was based on future expectations for It is said that the current financial results will be a valuable opportunity for investors to clarify the direction and strategy for the next stage of growth.
Source: Bloomberg, Nihon Keizai Shimbun, Tesla IR, Moomoo
This article uses automatic translation for some of its parts
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