By LIU Jiaxin
Tesla posted a worrying Q1 report on Thursday. Net profit is down 24 percent to US$2.5 billion (17 billion yuan) and free cash flow is down 80 percent to US$441 million.
The weakness is the inevitable result of numerous price cuts. Elon Musk, founder and CEO of Tesla, said in a conference call that the “price adjustment” is not over yet.
Unlike other car manufacturers
Musk said Tesla wants sales, not profit. The company is ready to increase production this year to deliver a total of 2 million vehicles. Tesla delivered a record 1.3 million vehicles in 2022, up 40 percent from 2021. The Shanghai plant was responsible for the production of 710,000 vehicles last year. That means that 54 percent of Tesla’s sales came through the Chinese plant.
Although 40 percent is the kind of growth other carmakers can only dream of, the pace of growth is slowing. Deliveries nearly doubled in 2021 and more than quadrupled in 2020.
Musk went on to send out some pretty mixed signals on his view of the future. Tesla, Musk said, is more of a tech company than an automaker, and unlike other car manufacturers, does not seek profit from selling cars.
Profit from its autonomous driving technology
Eventually, Tesla will profit from its autonomous driving technology. Musk believes that selling as many cars as he can, regardless of profit, will stand the company in good stead for the inevitable autonomous-driving revolution.
Autopilot comes standard on every new Tesla. A new beta version of Fully Self-Driving (FSD), the autonomous-driving system Musk talked about, was released to employees for testing a few days ago. For now, FSD is intended for use with a fully attentive hands-on-the-wheel driver. While features will become more available over time, currently enabled features do not make the vehicle autonomous.
Cybertruck to challenge all top-selling pickups
Musk also said Tesla’s electric pickup Cybertruck will be delivered in Q3. Tesla has delayed production several times already, but in April last year, Musk promised that the truck would be out in 2023.
The Cybertruck has the potential to challenge all of the top-selling pickups. Made of stainless steel, the Cybertruck can tow up to 14,000 pounds and has an estimated driving range of 800-plus kilometers. The cheapest is expected to come in under US$40,000.
Megapack stationary energy storage
Tesla’s energy storage project Megapack has made huge progress thanks to its Megafactory in California. Megapack is a giant lithium-ion battery sharing much of its technology with batteries in EVs. The “stationary energy storage product” is about the size of a standard shipping container and can be used to stabilize the grid and prevent outages, according to Tesla's website.
In Q3, work will get underway on the first Megapack plant outside the US. The plant will be located at Lingang in the Shanghai FTZ, already home to a Tesla Gigafactory. The factory will initially produce 10,000 Megapacks every year, approximately 40 GWh of energy storage.
