Tesla is a company in crisis.
Ahead of its Q1 earnings call tomorrow, investors are already feeling the pressure, with shares sliding over seven percent already today.
The core issue is that its sales are down considerably worldwide, with banks warning that the company's mercurial leader Elon Musk had created a "code red situation" by overinvesting his time slashing government funding with the help of his so-called Department of Government Efficiency.
Tesla's brand has borne the brunt of Musk's increasingly extremist views and abrasive behavior, with a record number of customers returning their vehicles to distance themselves from him. Shares are down over 50 percent since the company reached an all-time high in December, shortly after Trump was elected.
And compounding all that trouble is that Musk's vision for the future of Tesla is looking increasingly shaky. Just last October, Musk mocked the idea of a non-autonomous $25,000 car — previously his long-term "master plan" for the company — and called it "pointless."
Instead, Musk has increasingly gambled the company's future on self-driving tech — which, even after years of development, still can't drive the cars on its own — culminating in a "Cybercab" robotaxi that's supposed to be revealed this summer.
"It would be silly," he told investors at the time. "It would be completely at odds with what we believe."
As if that wasn't enough whiplash, now Reuters is reporting that the company is working on a cheaper vehicle, but that its development is running significantly behind schedule.
There's a lot we still don't know about such a car, which is rumored to be a stripped-down version of the company's popular Model Y SUV. We don't know when it will hit the market or how much it will cost. We also don't know when production will kick off in China and Europe, both areas where sales have plummeted this year.
Even if you ignore the immediate chaos of Tesla's plummeting sales and stock, this series of rapid reversals is enough to give even a die-hard investor pause. Musk seems to be vacillating between wildly different visions for the future of the company — a spectacle that's become commonplace at Twitter since he bought it, and during his activities in the federal government, which have been beset by comically overambitious promises and nonstop self-inflicted drama.
The signs that the company's leadership is trying to get ahead of some very bad news this week are certainly apparent. As Electrek points out, Musk announced that there would be a "live company update" during the earnings call on Tuesday. That's despite the CEO previously arguing that "earnings calls are not a place for product announcements."
It's still unclear what the company will announce during the update. But it's starting to look unlikely that Tesla is trying to get an ace up its sleeve that could save the company from a tarnished brand, weakening demand, and spiking import costs.
What's most likely is that Musk will update investors on his promise of bringing an "unsupervised" version of its driver assistance software to market — a long-deferred future, it's fair to point out, that he's been saying is imminent for well over a decade.
"The overwhelming focus is on solving full self-driving," Musk said during a June 2022 interview. "That’s essential. It’s really the difference between Tesla being worth a lot of money or worth basically zero."
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