Friday, April 21, 2023 9:57 am4 Comments

• News

Elon Musk is counting on full-self driving and other new technologies and vehicles at Tesla to provide the “wow factor” that will continue to drive the electric carmaker’s profit engine.

Hyunjoo Jin and Akash Sriram for Reuters:

Tesla on Wednesday doubled down on the price war it started at the end of last year, as Musk said the company would prioritize sales growth ahead of profit. In the first quarter, Tesla posted its lowest quarterly gross profit margin in two years.

“The market wants to see that Tesla management has a tangible plan to boost automotive gross margins and companywide operating profit margins over the coming quarters and in the next year or so,” said Morningstar analyst Seth Goldstein. “I also think the market wants to see a growth plan that does not involve continuous price cuts.”

Musk brushed aside those fears on Wednesday, saying the company this year would likely achieve full self driving and that would be a big profit generator. Musk has missed his previous targets to achieve self-driving capability, dating back years.

“We’re the only ones making cars that technically, we could sell for zero profit for now and then yield actually tremendous economics in the future through autonomy,” he told analysts on a conference call on Wednesday. “I’m not sure how many people will appreciate the profundity of what I’ve just said, but it is extremely significant.”

MacDailyNews Note: We’ll believe in full self-driving when we see it operating safely in real-life action.

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