Musk is telling stories again.

On October 24, Tesla released its third-quarter financial report for 2024. According to tradition, Musk usually tells stories on financial report days. From FSD to the humanoid robot Optimus, from Cybertruck to Robotaxi, Musk can always create topics and attract traffic.

However, stories eventually come to an end. After listening to too many promises about FSD and Robotaxi, Musk doesn't have many new stories to tell anymore. The financial report meeting tends to be dull. Besides financial data, it's mostly old stories we've heard before. The repeated delays have eroded trust in Musk, earning him the nickname of "Pie King."

Tesla, once a disruptive force in the automotive industry, now relies on empty promises to survive?

Marx's empty promises: cheaper cars, stronger FSD, and internal testing of RoboTaxi

At the financial report meeting, Musk admitted that all electric vehicle manufacturers worldwide face profit pressure, and Tesla is no exception. However, Tesla is confident about its future and plans to deliver new, lower-priced models starting in early 2025, with an optimistic estimate of a 20% to 30% increase in deliveries next year.

Image source: Tesla's official website

Here are the key points from the financial report meeting:

1. Tesla's third-quarter revenue increased by 8% year-on-year to $25.18 billion, but fell short of Wall Street's expectations of $25.37 billion.

2. Tesla's third-quarter net profit was $2.167 billion, a 17% increase from $1.853 billion in the same period last year, reversing a trend of consecutive declines.

3. At the financial report conference, Tesla reiterated its plan to start producing new models, including low-priced ones, in the first half of 2025, but did not disclose more details, stating only that these new models will be manufactured on existing production lines.

4. The FSD 13 version will be released later in the winter, with an expected 5- to 6-fold increase in miles per takeover. Musk predicts that FSD's miles per takeover will continue to increase in the second or, at the latest, third quarter of next year.

5. Internal testing of RoboTaxi has begun. It is currently open to internal employees, who can order rides through their phones, and the vehicles will transport passengers to any location in the Bay Area. However, a safety officer is still required to accompany passengers.

Embarrassingly, aside from the financial data, everything else at the financial report meeting was just empty promises.

Tesla's stories are seductive, but when will they become a reality?

Let's see how many empty promises Musk has made so far:

1. Fully autonomous FSD version

2. RoboTaxi

3. Humanoid robot

4. Tesla's low-cost model

RoboTaxi and FSD are complementary products. As seen at the October 11 event, the Cybercab is without a steering wheel, pedals, or rearview mirrors, indicating that it will eventually feature an L4-level, fully autonomous FSD version that operates without human supervision, as Musk himself confirmed at the event.

However, an FSD that operates without human supervision is still a future prospect.

At the financial report meeting, Musk mentioned that internal testing of RoboTaxi with the fully autonomous FSD version will open to the public in California and Texas next year, with Texas expected to launch sooner due to California's longer approval process. This is still just internal testing, and actual mass production may not occur until 2026, with official operations remaining unknown.

Image source: Tesla's official website

In contrast, Tesla's domestic competitor Waymo has officially launched its RoboTaxi service in Los Angeles, San Francisco (both in California), and Phoenix (Arizona). It has completed two million driverless trips so far.

In Tesla's crucial Chinese market, Baidu's Luobotukuai is testing driverless rides in 11 cities, and XPeng plans to collaborate with leading operators like Didi and Uber to carve out a share of the RoboTaxi market as early as 2026 by empowering individual vehicles with technology.

RoboTaxi in China and the United States seems poised for large-scale commercialization, and no one will wait for Tesla. Tesla is not the only company eyeing RoboTaxi. Even in the best-case scenario, where Tesla's RoboTaxi achieves mass production by 2026, actual operations won't start until at least 2027, lagging significantly behind the market.

As for the humanoid robot Optimus, frankly, it seems more like a tech demo from Musk. According to Tesla's plan, limited production of Optimus will start in 2025, with mass production beginning in 2026. However, in terms of application, Optimus's strategic significance outweighs its practical value.

This means that uncertainties remain regarding the fully autonomous FSD, RoboTaxi, and Optimus. Given Musk's history of delays, let's not take these promises too seriously for now.

With difficulties in realizing its core businesses, the only promise that could potentially "lift off" Tesla is the low-cost model.

Tesla's market share in China declines, and it hopes to break through with low-priced cars

In the first half of 2024, Tesla sold a total of 426,600 vehicles in China, a year-on-year decline of 10.47%, including domestic sales and some exports. Specifically, Tesla sold 70,000 Model 3s in China in the first half of the year, down 20,000 from the over 90,000 sold in the same period last year.

Foreign media outlets have suggested that Chinese consumers are "shunning" Tesla due to competitors' more attractive electric vehicle models. Tesla's electric vehicle market share in China has declined from 9% a year ago to 6.5% in July this year. Since 2019, Tesla has not released any new electric vehicles in China.

Musk's response is also telling: "People who believe those reports are foolish. Tesla's Shanghai factory is operating at full capacity."

Image source: Tesla's official website

Upon closer inspection, Musk's response seems somewhat irrelevant. Foreign media outlets are discussing market share declines, while Musk is responding with production capacity. In other words, while it's difficult for Musk to deny the reality of Tesla's challenged market share in China, he can only argue from a different angle.

Clearly, Tesla urgently needs fresh blood to stimulate sales, which is why Musk keeps making empty promises. Of course, empty promises alone are not enough to improve the situation. Tesla's prices must come down, reaching deeper into BYD's territory, the price range below 200,000 yuan.

Regarding Tesla's low-cost model, not only consumers but also investors are eagerly awaiting it. After the October 11 event, Ross Gerber, CEO of Gerber Kawasaki Funds and a major Tesla shareholder, expressed his delight at autonomous taxi models like the Cybercab and Robocan but said he would prefer to see Tesla release a more traditional, lower-priced entry-level electric vehicle that can hit the market soon.

Just in the Chinese market, the later Tesla's low-cost model enters, the greater the competitive pressure will be. Currently, the domestic auto price war has not subsided, with several automakers, including Leapmotor, AITO, Chery, and Geely, having released new discount policies in recent months. Not to mention highly anticipated newcomers like XPeng's MONA and NIO's LeDao, which are lining up to compete with Tesla.

The 150,000 to 200,000 yuan price range is a crucial battleground in the new energy vehicle market, backed by a huge basic stock market and a sustainable incremental market. Musk and Tesla will undoubtedly not miss out on this market. However, they shouldn't keep consumers waiting too long. As a Tesla shareholder said, we all know that Tesla will eventually launch a low-cost model, but the best time to do so is now.

Summary:

From the financial report data, Tesla is still profitable and firmly positioned as a leader in the global new energy industry. Whether or not Musk's promises materialize is not crucial. Rather than waiting for the futuristic humanoid robot or robotaxi, consumers are more concerned about when Tesla will launch its low-cost model priced at around 150,000 yuan. After all, when the dust settles, earning a living remains the priority.

Cover image source: Tesla's official website

Source: Leitech