“They’re extremely good” – Musk: Only import barriers are slowing down China’s electric cars

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Tesla’s rapid growth is slowing. In the last quarter, the electric car maker missed Wall Street expectations; there is no sales target for this year – but it is admitted that deliveries are growing noticeably slower and rivals from China are becoming a problem. However, company boss Elon Musk paints a rosy picture: Tesla is between two waves of growth, is developing a ‘revolutionary’ production system and could thus become the most valuable company in the world.

This didn’t impress investors: While Musk was still speaking to analysts on a conference call, the stock fell deeper into the red, losing almost six percent at the end of after-hours trading.

The new production process is intended, among other things, to build a cheaper compact model. Under current plans, production in Austin, Texas, should begin in the second half of 2025, Musk said. At the same time, he qualified: “I am often optimistic about time.”

“They are extremely good”: BYD overtakes Tesla
The cheaper model is of strategic importance for Tesla because competition from Chinese manufacturers is increasing. Manufacturer BYD sold more electric cars from China in the past quarter. Throughout 2023, Tesla was still leading with 1.81 million vehicles, but it is foreseeable that BYD will become number one.

Chinese automakers are so strong that without trade barriers, most of the industry would have no chance, Musk warned. “They are extremely good,” he said on the conference call. “If there are no trade barriers, they will virtually destroy most of the other auto companies in the world.” In the US, a 25 percent import tariff keeps Chinese car manufacturers out.

Robotaxi without steering wheel and pedals is coming
According to previous information, Musk also wants to build a robotaxi without a steering wheel or pedals on the same technical basis as the cheaper model. To achieve this, Tesla would first have to develop the autonomous driving technology that Musk has been promising for years.

Tesla does have an advanced version of its ‘Autopilot’ assistance system called ‘Full Self-Driving’ (FSD). Contrary to what the name suggests, the technology of a Tesla does not make a truly autonomous car: the driver still bears responsibility and must be ready to take control at any time. But FSD is at least trained in adhering to traffic lights and priority rules. However, the software is still in a testing phase and makes mistakes – while Musk continues to promise that it will be ready soon.

Six months ago, Musk caused a stir when he announced that Tesla was in discussions with a major manufacturer interested in using the FSD software. Now, when asked, he said they had only approximated it: “I think they believe it’s not real yet.” But this year they will provide proof, he assured.

Musk wants more influence at Tesla again
Musk reiterated that he would only feel comfortable developing artificial intelligence software and robots at Tesla once he gained more influence at the company. He currently owns about twelve percent of the shares and voting rights – and other investors could benefit from this, Musk argued. He aims for a quarter of the voting rights. “Ideal” for this are shares with more voting rights, he now says. With such shares, founders such as Mark Zuckerberg of Facebook Group Meta or Larry Page and Sergey Brin of Google parent Alphabet protect their control over the companies. Musk said he wanted “strong influence, but no control.”

At the same time, Musk once again had to curb his own impatience. Ever since he announced that the humanoid robot ‘Optimus’ would one day work on Tesla’s production lines, investors have wanted to know when that would happen. Musk also circumvented this time. In any case, he promised that the first Optimus robots could be built next year.

Tesla’s turnover increased by three percent year on year to 25.17 billion dollars (23.08 billion euros). Analysts on average had expected revenue of nearly $25.9 billion, but Tesla did not provide any forecast for deliveries in the current year. Analysts estimated around 2.1 million vehicles. Last year, after several price cuts, Tesla achieved its delivery target of 1.8 million electric cars – an increase of 38 percent.

Tesla’s quarterly profit rose from $3.7 billion to $7.9 billion annually. However, analysts also expected earnings per share to be higher than the announced 71 dollar cents.

Source: Krone

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