Financial expert explains how Elon Musk plans to save Tesla reputation with ‘bright shiny object’
A financial expert has broken down how Elon Musk might plan to save Tesla amid the company's disastrous Q1 results.
Tuesday's earning releases revealed the automaker's profits have fallen by more than than two-thirds between January and March, while its share price has plummeted by more than half.
Revenue fell nine percent to $19.3 billion, as per Investor's Business Daily, which pales in comparison to Wall Street's $2.11 billion estimations.
On top of that, the much-hyped Cybertruck is failing to live up to expectations, with just 6,406 delivered this year until March, according to Cox Automotive.
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That's a far-cry from the 250,000 units a year Musk predicted when he launched the controversial, angular vehicle back in 2023.
It all comes as Tesla CEO Elon Musk has faced backlash over his role as Donald Trump's federal-budget-busting DOGE advisor.
His time as the president's right-hand man is set to be reduced 'significantly' as Musk refocuses on his struggling electric vehicle business.
Tesla itself has been facing a raft of struggles, from vandalism of vehicles and showrooms to plummeting stocks.
Amid analysts' reaction to Tesla's flop Q1 results, Bloomberg's global automotive editor, Craig Trudell, explained how the billionaire is planning to save Tesla's reputation.
But he reckoned there will still be one major question left unanswered, even as we head for Q3 at the start of July.
Speaking of Musk's involvement with the Trump administration, Trudell said of Tesla: "They're they're now part of a much broader group of companies that are having trouble getting a handle on the outlook for for their business as a result of all the uncertainty, and under the Trump administration.
"But I think it's particularly remarkable to see that out of a company that is so synonymous with a person who is so closely tied to that administration."
Prior to Tesla's earnings release, Morgan Stanley analyst Adam Jonas warned to 'hang on for some weak numbers' but suggested these figures may not matter.
Referring to this, Trudell expanded: "But here are the things that matter more, which is ways that that Musk can sort of wave the bright, shiny objects to get people to look past these numbers and [give them] something to believe in. And oftentimes, that tends to be autonomous vehicles from Tesla."
Asked whether the 'bright shiny' object is a robotaxi event in June, Trudell responded: "Yeah - I think even Musk it is a little bit conservative in terms of talking about when that's actually going to be ready as a product for external use. For the time being, it's an internal project."
During Tuesday's investors call, Musk confirmed plans to roll out a 'pilot' of Tesla's self-driving robotaxis - known as Cybercabs - this June.
Model Y cars will be equipped with Tesla's Full Self-Driving (FSD) software, operating without a human driver. Initially, the service will be limited to a small fleet of 10 to 20 vehicles within a designated area of Austin.
Unlike Tesla's current FSD system, which requires driver supervision, this new service will be entirely autonomous.
Trudell continued: "I do think that launching a service in Austin in June is absolutely something that Musk has sort of laid down as a marker for progress on that front.
"But I think it's going to be difficult to parse, just how much that puts Tesla on some pedestal or are they, in the end, just catching up to a company like,
say, Waymo - that has been deploying in cities increasingly all over all over the US and has been at this for four years now?"
Trudell added that this could be a question that remains 'unanswered' by Musk even as the year unfolds.
"Does Tesla actually have a generalized solution for self-driving or not?" he asked. "And that's still going to be an unanswered question... as of as of June, if I was a betting man."
At Tesla's We, Robot event in October, Musk suggested production on the Cybercabs would begin some time 'before 2027,' before cautiously adding: "I tend to be optimistic with time frames."
The project had already been pushed back from August 2024 due to design changes Musk said he felt were important to make.
Topics: Tesla, Elon Musk, Business, Donald Trump, US News, Electric Cars, Money
Ellie Kemp