USA (Washington Insider Magazine) —As Tesla struggles with declining global sales and a falling share price, the company has resorted to increased price cuts on selected electric vehicle models and its “Full Self Driving” system to recover profitability.
Despite Wall Street analysts awaiting CEO Elon Musk’s statements when Tesla presents its first quarter financial report after the US stock market closes, have not been impressed by the move on Tuesday. The almost 9% drop in sales in the first quarter of 2024 has voiced concerns among industry experts about demand for Tesla’s electric vehicles.
Elon Musk appears to be pinning his hopes on the long-awaited Robotaxi, which he has touted as a potential growth driver for Tesla since introducing the necessary hardware in late 2015. Although it is marketed as “Full Self Driving”,” Tesla admits on its website that the system requires human intervention.
Disappointment Over Delayed Robotaxi
Originally promised for 2020, the rollout of autonomous robotaxis has faced repeated delays, leading to skepticism among industry analysts. Instead of delivering on its promises, Tesla has witnessed declining prices and continued delays in the deployment of autonomous features.
Market Reaction to Price Cuts
According to Lesaffaires, Tesla’s stock price fell 3.4% on Monday after the company announced price reductions for the Model Y, S, and “Full Self Driving” system over the weekend. Tesla’s stock has decreased by about 43% so far this year, while the S&P 500 has up by 5%.
Analysts’ Perspectives
John Murphy from Bank of America Global Research expressed skepticism about Tesla’s growth prospects, tracing the pressure on Tesla’s shares to declining electric vehicle sales and production outpacing demand. However, he acknowledges possible opportunities as Tesla unfolds future growth drivers.
Tesla’s Recent Developments
Tesla’s workforce reduction, departure of a senior executive, and a rejected compensation proposal for Elon Musk highlight the challenges facing the company. Despite producing over 433,000 vehicles in the first quarter, concerns persist regarding its profitability and strategic direction.
Challenges with “Full Self Driving” Technology
Tesla’s “Full Self Driving” system is being scrutinized by safety regulators and industry experts due to its limitations. Critics argue that depending primarily on cameras for autonomy raises safety concerns, stressing the importance of additional sensor technologies such as lidar and radar.
While Elon Musk disregards the necessity of lidar, citing human drivers’ reliance on vision alone, experts assert the limitations of camera-based systems in diverse driving conditions. The debate affirms the complexities and uncertainties surrounding the future of autonomous driving technology.