News: 1706206513

  ARM Give a man a fire and he's warm for a day, but set fire to him and he's warm for the rest of his life (Terry Pratchett, Jingo)

Missed expectations, zero guidance: Tesla's 'great year' was anything but

(2024/01/25)


When Elon Musk says Tesla had a "great year," it's best to read between the lines – especially after such a disastrous quarterly earnings call.

Tesla shares plummeted in aftermarket trading and [1]kept falling (by more than 10 percent as of writing) as markets opened the morning after Musk and company held their [2]call with investors, and there's no shortage of reasons why.

There was the usual Musk hyperbole, some of which may be beginning to wear thin for investors, but the most glaring problem seems to be Tesla's outlook – and a total lack of guidance for the coming year.

[3]

While touting record production and delivery (completely overlooking the hard [4]numbers [PDF] that [5]missed Wall Street expectations), Musk warned that Tesla was entering 2024 "between two major growth waves." Those waves were better defined by Tesla as the previous expansion of Model 3 and Y availability and Tesla's forthcoming "next generation platform" that will be part of future vehicles along with a briefly mentioned, low-cost mystery model.

[6]

[7]

"In 2024, our volume growth will be lower, as we have said, because we're trying to focus the team on the launch of the next-generation vehicle," Tesla CFO Vaibhav Taneja said. "There will be periods where we won't be growing at the same rate as before."

That's about as close to guidance as the call got, and neither analysts nor investors are happy.

[8]

"This was a 101 how not to do a conference call," Wedbush managing director and senior equity analyst Dan Ives [9]said on Bloomberg Surveillance this morning. "We're still bullish [on Tesla, but] the biggest issue here is that [Tesla] didn't give any goalposts. The bears won last night."

Speaking of the next-generation vehicle platform that is keeping Tesla from its next growth wave, Musk was quite cagey when asked about its availability.

"Our current schedule says that we will start production toward the end of 2025, so sometime in the second half," the Tesla CEO said, with added caveat: "That's just what our current schedule says."

[10]

"You know, I don't want to blow your minds, but I'm often optimistic regarding time," the electric automaker's boss admitted.

Thanks, Elon – [11]we know .

Musk predicts a China-dominant Westworld future

It wouldn't be a Tesla earnings call without some bizarre statements and predictions from supremo Musk, and this one didn't disappoint.

There were routine aggrandized statements, of course. Musk described the Cybertruck as Tesla's "best product ever," which isn't instilling confidence given the behemoth's [12]track [13]record .

Musk also proclaimed the upcoming [14]version 12 of Autopilot, in which Tesla allegedly "replaced 330,000 lines of C++ code with neural nets" for "a complete architectural rewrite compared to prior versions," as "end-to-end artificial intelligence" – a claim sure to thrill regulators [15]investigating [16]overblown Autopilot claims.

Those relatively routine statements were hardly the most interesting parts of the call, though.

[17]'Recession-resilient' Tesla misses Q3 expectations, slows Mexico expansion

[18]Tesla says California's Autopilot action violates its free speech rights

[19]Tesla, Musk likely aware of Autopilot deficiencies behind Florida fatality, says judge

[20]Musk: Tesla's doing great. I mean, have you seen my Twitter follower count?

When asked about the competition from Chinese electric vehicle makers, Musk described them as "the most competitive car companies in the world," and predicted global dominance if the rest of the world doesn't start sandbagging its ports.

"Frankly, I think if there are not trade barriers established, they will pretty much demolish most other companies in the world," Musk said. "They're extremely good."

Rather than fighting the red EV menace, it seems Musk would rather partner with it.

"We're obviously happy to give any electric car company access to our supercharger network," the CEO said. "We're also happy to license full self-driving, perhaps license other technologies and, you know, anything that could be helpful in advancing the sustainable energy revolution."

But the hottest air escaping from Musk's mouth was in response to questions about the company's [21]Optimus humanoid robot , once a [22]man in a suit and now a clunky proto-Cylon able to fold shirts – [23]provided someone is at the helm.

Shortcomings aside, Musk predicted Optimus will ship surprisingly soon.

"I think we've got a good chance of shipping some number of Optimus units next year," Musk said on the call. "It has the potential to be the most valuable product of any kind ever, by far."

Musk kept going. "We're really building the future. I mean, the Optimus lab looks like the set of Westworld, but admittedly, that was not a super utopian situation," Musk said. It was at that point an unknown speaker on the call stepped in.

"Yeah, not the best reference," the speaker, who was unidentified in call transcripts, said. "We're not entering Westworld anytime soon."

All in all, your typical messy Tesla earnings call, which Ives boiled down in one concise paragraph.

"We were dead wrong expecting Musk and team to step up like adults in the room on the call and give a strategic and financial overview of the ongoing price cuts, margin structure, and fluctuating demand," the Tesla bull [24]said . "Instead, we got a high-level Tesla long-term view with another train wreck conference call."

Ouch. ®

Get our [25]Tech Resources



[1] https://www.marketwatch.com/investing/stock/tsla

[2] https://www.fool.com/earnings/call-transcripts/2024/01/24/tesla-tsla-q4-2023-earnings-call-transcript/

[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/aiml&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZbLoH1v6RYB9IAK2HkbRyQAAAMM&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0

[4] https://digitalassets.tesla.com/tesla-contents/image/upload/IR/TSLA-Q4-2023-Update.pdf

[5] https://finance.yahoo.com/video/tesla-q4-earnings-miss-warns-220036080.html

[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/aiml&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZbLoH1v6RYB9IAK2HkbRyQAAAMM&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0

[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/aiml&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZbLoH1v6RYB9IAK2HkbRyQAAAMM&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0

[8] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/aiml&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZbLoH1v6RYB9IAK2HkbRyQAAAMM&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0

[9] https://twitter.com/DivesTech/status/1750492031795831245

[10] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/aiml&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZbLoH1v6RYB9IAK2HkbRyQAAAMM&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0

[11] https://www.theregister.com/2023/07/17/first_tesla_cybertrunk/

[12] https://www.theregister.com/2019/11/22/smashing_tesla_cybertruck/

[13] https://www.theregister.com/2024/01/24/tesla_cybertruck_offroading_video/

[14] https://www.teslaoracle.com/2024/01/23/tesla-tsla-rolls-out-autopilot-fsd-beta-12-to-limited-non-employee-owners-for-extra-cautious-testing-video/

[15] https://www.theregister.com/2023/07/28/tesla_california_ag_investigation/

[16] https://www.theregister.com/2023/10/23/telsa_doj_investigation/

[17] https://www.theregister.com/2023/10/19/tesla_q3/

[18] https://www.theregister.com/2023/12/11/tesla_california_autopilot_lawsuit/

[19] https://www.theregister.com/2023/11/22/tesla_autopilot_flaw_liability/

[20] https://www.theregister.com/2023/01/26/tesla_boasts_record_year_conveniently/

[21] https://www.theregister.com/2022/10/03/tesla_optimus_prototype/

[22] https://www.theregister.com/2021/08/20/tesla_ai_day/

[23] https://www.independent.co.uk/tech/tesla-robot-folding-shirt-musk-b2479204.html

[24] https://www.benzinga.com/analyst-ratings/analyst-color/24/01/36779488/tesla-bull-rues-train-wreck-earnings-call-slashes-price-target-by-10-dead-wrong-exp

[25] https://whitepapers.theregister.com/



FSD on old Hardware

gecho

I wonder what kind of performance people that shelled out $15,000 for FSD hardware can expect from neural algorithms. Tesla will likely add AI accelerators to new hardware, but the older hardware without them will likely perform far worse.

Re: FSD on old Hardware

abend0c4

They probably need to work out how to get through an earnings call without leaving wreckage in their wake before they move on to harder problems.

Re: FSD on old Hardware

aerogems

They already hobbled older models with LiDAR sensors on them, forcing them to use less reliable optical cameras, so I'm guessing it'll be more or less the same sort of deal. Probably complete with training the call center reps to convince people it's something they did as opposed to the company giving them the shaft when they call in to say that their infotainment system is considerably more sluggish after the FSD v12 update. They already try to charge people thousands of dollars to replace the eMMC which takes down pretty much the entire car once the write cycles are used up.

Re: FSD on old Hardware

Jellied Eel

Tesla will likely add AI accelerators to new hardware, but the older hardware without them will likely perform far worse.

This is fine. This is why Wales and other parts of the world are implementing 20mph speed limits so the neural nets can keep up with the sheep.

aerogems

Maybe investors are finally starting to clue into the fact that Xitler is the emperor with no clothes. They've gotten a good look at just how badly he's fucked up every single thing at Xitter. Literally the only thing I can think of as a positive with regards to Xitter, is that I figured it would have already been bankrupt and consigned to the /dev/null of history by now, but it's still somehow limping along. Not only that, they've seen him going further and further down the conspiracy nutter rabbit hole on Xitter.

Then there's the fact that companies like BYD have already eaten Tesla's lunch in the China market. The CyberTruck has been the subject of much amusement with it getting stuck in places where it should easily be able to get out, and the guillotine-like doors that will likely take someone's finger(s) off in the near future if it hasn't already.

Rounding things out is the fact that, once again, he's demonstrating that he doesn't know what the fuck he's talking about. You don't replace C++ code with neural nets. There's no "neural net" programming language, they're something you write using a programming language like C++. Maybe they replaced some old hardcoded decision trees with ML code, but odds are it was still written in C++. It's like the infamous conference call where a former Xitter employee was asking Xitler to walk him through exactly what was wrong with the Twitter code stack and how he planned to address it, and all Xitler could do was call the person a jackass.

Best case scenario, Xitler is just stretched too thin between all his different business ventures. More probably is he's just an idiot who has no idea what he's doing, never has, and basically used his family's wealth to backstop some highly speculative investments that ended up paying off pretty well. He's a grifter, plain and simple. At least when he was a high functioning drug abuser he was useful as a rain maker, able to convince people to invest in his companies. Now, he seems to have hit the tipping point where the drug abuse is taking over his life and everything else suffers.

https://news.yahoo.com/flustered-elon-musk-flips-jackass-210802495.html

Jellied Eel

More probably is he's just an idiot who has no idea what he's doing, never has, and basically used his family's wealth to backstop some highly speculative investments that ended up paying off pretty well.

Not strictly true I think, but traded the money he made from Paypal into Tesla, then used that to backstop family losses. So when Tesla bought Solarcity off Elon's cousins and brother. That seemed to pay well for the Muskovites, less well for ordinary shareholders.

At least when he was a high functioning drug abuser he was useful as a rain maker, able to convince people to invest in his companies. Now, he seems to have hit the tipping point where the drug abuse is taking over his life and everything else suffers.

Apparently he's also demanding a new executive compensation package and more stock to mebbe keep him interested. Mebbe Tesla's investors will say 'NO'. Given how leveraged Musk's portfolio must be, having someone else driving Tesla might end up being good for Elon's security though.

This was a 101 how not to do a conference call

Anonymous Coward

Sorta like the announcement of Ron De Santis's now defunct campaign for POTUS.

Tesla is stuck with really just two volume models, the '3' and 'Y'. Everything else is just window dressing. So he says that a small car might be coming in 2025...

In Musk years, that is 2027 at the earliest. If they were planning volume production of the Model 2 (or whatever it will be called) then they'd have at least one prototype on the roads for testing.

We are seeing MY2025 models on the road from other makes already.

The more he speaks, the more I am convinced that he is 'all mouth and no trousers', a film-flam guy, a snake oil seller or a combination of all three yet the Teslarti cult still bend the knee for him as if he is some sort of deity.

Re: This was a 101 how not to do a conference call

Anonymous Coward

Yeah, yeah, just you wait until the Musk Militia is old enough to drive. Sales will go through the roof.

Re: This was a 101 how not to do a conference call

CountCadaver

That's funny as gen z and gen a have little interest in learning to drive according to various sources...

Musk vs. the investor class

Throatwarbler Mangrove

On the one hand, I would not particularly put any stock in anything that Musk says. On the other hand, if he wants to take the piss out of the rent-seeking economic parasites known as the investor class, who are we to stop him? He has the luxury of blowing smoke up the asses of other self-important blowhards who are used to having their every prognostication taken as Gospel, and who wouldn't enjoy that?

Re: Musk vs. the investor class

andrewj

While I vicariously agree, the trouble is that when the music stops it's not the investor class who end up paying the economic costs of the subsequent bust. They get bailed out.

Re: Musk vs. the investor class

Andy 73

Yes, just wait till you find out where your pension was invested...

"focus the team on the launch of the next-generation vehicle"

Pascal Monett

Why does that remind me of a certain Sinclair ?

Re: "focus the team on the launch of the next-generation vehicle"

Andy 73

Sinclair was late, usually because he couldn't get manufacturing going fast enough. He rarely announced products that didn't exist.

Musk on the other hand fakes product videos, claims features that don't exist and viscously attacks anyone who calls him out.

I think I preferred Sinclair's approach. He also didn't claim to be saving the planet.

Re: "focus the team on the launch of the next-generation vehicle"

Ace2

Thank you, thank you, for the delightful image of Musk “viscously attacking” someone. What an awesome typo. I might be still be laughing tomorrow.

He’s such a godawful dbag.

Right

StrangerHereMyself

I hate to say this, but Musk is basically right about Chinese car manufacturers eventually crushing Western ones if we don't impose trade restrictions on them. Loss of the car industry in Europe would be a huge blow since there's little else the continent produces which is as profitable and generates the same amount of employment. Germany especially is being kept afloat by its car industry. Europe has completely missed out on the Internet and therefore has little earning capacity beyond automobiles.

My proposal would be to allow China to export 1 (one) car to the EU for every European car that it imports, and no more. This will have the added benefit of giving China the incentive to import more European cars.

If my proposal isn't accepted and people instead demand cheap Chinese cars the European car industry will be decimated within two decades.You have been warned.

Re: Right

aerogems

The problem is, most people only ever look at the sticker price of things they buy.

Let's just use TVs as an example. You could have two models with exactly identical specs, but one was made from as many US/EU/UK sourced components as possible, and assembled in country/region by people who were paid a prevailing wage. The other model was made in China with effectively slave labor. Difference in price is 100USD/GBP/EUR for let's say a 2000USD/GBP/EUR set. I pretty much guarantee the cheaper model would sell significantly better. You could even put up signs saying "Made with Chinese slave labor" and "Made by US/UK/EU citizens paid a living wage" and the cheaper model would still sell better by a healthy margin.

As a whole, all of us in the west need to wean ourselves off of cheap Chinese made goods. You want to sell your wares there, fine, but we need to start collectively be willing to pay a little more to make sure we have goods that are made by people who are actually paid a living wage. Once upon a time we somehow managed to do this and make it by economically, I'm sure we could do it again.

Complete autopilot rewrite

DS999

Because of course what all of us tech knowledgeable people would love is to trust our lives to a ground up rewrite (and with "AI", so the engineers at Tesla won't even be able to tell anyone why your car went straight for that telephone pole!)

<ultima> netgod: My calculator has more registers than the x86, and
-- thats- sad