Tesla (NASDAQ: TSLA) recently disclosed its first-quarter figures, with a less than impressive outcome due to a decline in electric vehicle (EV) sales reflecting on the company’s financials. Total deliveries plummeted by 9%, while automotive revenue slid by 13%, amounting to $17.4 billion, and total revenue took a hit of 9% down to $21.3 billion. Earnings per share also witnessed a significant decline of 47%, standing at $0.45, with cash outflows amounting to $2.5 billion.
Despite this lackluster start to the year, Tesla’s stock saw a surprising 12% leap following the announcement of its financial results.
Tesla’s Pivot to AI Robotics
On the earnings call, CEO Elon Musk shifted the narrative around Tesla’s future trajectory, asserting that it should now be perceived as an artificial intelligence (AI) or robotics entity. Musk dismissed the notion of valuing Tesla merely as an auto company, emphasizing the pivotal role of autonomy, particularly in self-driving vehicles.
With Tesla’s AI-powered self-driving technology, FSD V12, already operational in approximately 1.8 million vehicles on the roads, Musk envisions leveraging this technology to establish a substantial fleet of robotaxis or cybercabs. By employing a ground-breaking ‘unboxed’ manufacturing approach, Tesla aims to revolutionize its production process for robotaxis, ultimately reducing manufacturing expenses significantly.
Musk’s ambitious vision extends to harnessing the computing capabilities within Tesla vehicles to engage in distributed inference tasks during downtime, likening it to Amazon’s unexpected success with its cloud service division, AWS.
Musk’s Visionary Ideals
Elon Musk’s bold assertions echo a fundamental truth: valuing Tesla solely as an auto manufacturer might not yield favorable investment outcomes. With Tesla trading at over 55 times forward earnings and over 5 times sales, traditional automakers like Ford and General Motors seem more conservatively valued in comparison.
Nevertheless, if Tesla successfully transitions into an AI robotics entity, the potential for growth knows no bounds. Investing in Tesla equates to investing in Musk’s futuristic vision, where electric vehicles are just one aspect of a larger, more transformative landscape.
While not all of Musk’s visionary ideas may come to fruition, a significant number of successful endeavors could propel Tesla into a bright future.
Tapping into the Future with Tesla
Having retraced over 40% from recent peaks, now may present a strategic entry point for investors looking to align with Musk’s AI robotics vision through Tesla.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Tesla. The Motley Fool recommends General Motors and recommends the following options: long January 2025 $25 calls on General Motors. The Motley Fool has a disclosure policy.