Tesla is set to release its first-quarter earnings on Tuesday after the market closes – and the electric vehicle (EV) maker faces a reckoning from investors after a big sales miss.
The company saw vehicle deliveries decline in the first quarter for the first time in nearly four years – falling well short of analysts' expectations amid a price war in China, where domestically made EVs like those from BYD have taken market share.
Tesla has responded with price cuts for its most popular cars as well as its Full Self-Drive (FSD) software meant to reinvigorate customer demand.
Tesla also announced last week that it will lay off about 10% of its global workforce in a bid to control costs. Its stock has fallen over 42% year to date as of Monday's close amid the competitive challenges and financial headwinds it faces, which have left the EV maker at a crossroads.
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CEO Elon Musk will look to reassure investors about the direction of Tesla, the world's most valuable automaker by market capitalization, during Tuesday's earnings call. Here's a look at some of the topics that may be a focus during the call:
In early April, Musk posted on X, formerly Twitter, that Tesla will unveil a robotaxi on Aug. 8 and later added that going "balls to the wall" on autonomous vehicles was a "blindingly obvious" move.
Musk's robotaxi push comes at a pivotal moment for Tesla and amid legal and regulatory challenges in the pursuit of fully autonomous vehicles.
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Tesla has long touted its Autopilot and Full Self-Driving systems, though they fall short of full autonomy and require drivers' active supervision. The company has also faced lawsuits and investigations into those technologies.
Robotaxi being thrust to the forefront of Tesla's planning – potentially at the expense of a long-awaited, low-cost EV option – will likely make it a topic worth paying attention to during Tuesday's earnings call.
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Tesla and Musk have long hinted at plans to make a cost-friendly EV, often referred to as the "Model 2" which has reportedly been developed by the company under the code name "Redwood." However, the company's focus on its robotaxi plans has left the status of that project unclear.
In early April, Reuters reported, citing three unnamed sources familiar with Tesla's plans, that the company has scrapped its plan for the low-cost EV, which was expected to have a starting price of $25,000. The outlet also said it reviewed several internal documents confirming the project's demise.
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Musk wrote on X that "Reuters is lying (again)" in response to the report. He had previously said the low-cost EV would be available in 2025. The outlet noted his response in its story and observed that "[he] did not identify any specific inaccuracies."
The uncertainty around the company's plans and the market's reaction to that report – Tesla's stock fell by nearly 5% after the story broke – suggest that Musk or other Tesla executives may discuss the project's status during Tuesday's earnings call.
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Earlier this year, Musk made headlines about Tesla's role in the artificial intelligence (AI) race when he wrote on X, "I am uncomfortable growing Tesla to be a leader in AI & robotics without having ~25% voting control."
He added that the amount of voting power would "mean I am influential, but can be overridden if twice as many shareholders vote against me vs for me," but without that much control he "would prefer to build products outside of Tesla." A recent regulatory filing indicated that when including Musk's unexercised options, he owns about 21% of Tesla as of the end of March.
Musk also noted recently that rival companies in the AI space, such as OpenAI, have looked to poach Tesla's top AI engineers – in some cases successfully – so the company is boosting their compensation to keep them in the fold.
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In February, a judge in Delaware voided Musk's $56 billion pay package on the grounds that Tesla didn't fully inform shareholders about Musk's personal relationships with the board members who approved the pay package or the fact that Tesla was on track to achieve many of the performance targets tied to his compensation.
Given that and the compensation plan's status as the largest ever awarded to the leader of a publicly-traded company, the judge struck down Musk's pay plan. In response, Musk took to X and posted, "Never incorporate your company in the state of Delaware."
Tesla has put the potential reinstatement of Musk's pay package to the company's shareholders for a vote, along with a potential change in the company's incorporation state.
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Tesla's physical headquarters is currently located in Texas, but in the wake of the Delaware ruling that invalidated his pay package, Musk has pushed for Tesla to be reincorporated in Texas.
Several of Musk's other companies are incorporated in Texas, including SpaceX – a privately-held company that Musk announced switched its business registration state from Delaware to Texas in mid-February.
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Shareholder votes on reinstating Musk's pay package and changing Tesla's state of incorporation are expected to take place at the company's shareholder meeting on June 13.
FOX Business' Breck Dumas, Aislinn Murphy and Reuters contributed to this report.
