In case you missed it, Tesla’s first-quarter numbers came in, and they have Wall Street running for the hills, with critics cheering: “I told you so.”
The company reported its first quarterly drop in deliveries in nearly four years, a moment some have termed a stark deviation from its historical trajectory of relentless growth. However, it’s worth delving deeper to understand the factors at play.
Economic and Competitive Landscape
First and foremost, the broader economic landscape cannot be overlooked. With rising interest rates dampening consumer spending power, the cost of living soaring, and the global economy showing signs of strain, the automotive sector, especially the EV market, has not been immune to these headwinds. Therefore, Tesla's sales performance this quarter cannot be viewed in isolation but as part of a larger economic tableau that has also left its mark on other sectors. The company also expected this, which prepared investors for a difficult year during the last earnings call.
Moreover, the competitive landscape has been intensifying. BYD, Tesla's closest competitor and a powerhouse in its own right, briefly overtook Tesla in sales in the last quarter of 2023, only to experience its own significant sales drop of 43% in the first quarter of 2024. This parallel trajectory underscores a shared challenge: navigating a market that is becoming increasingly saturated, competitive, and sensitive to pricing dynamics.
Musk's Commentary
In the wake of Tesla's reported delivery numbers, Elon Musk took to his platform X, which he has 180 million followers, to address critics directly. Musk's response to investment analyst Ross Gerber's continued criticism, stating, "He’s such an idiot that he can’t even tell he’s an idiot," defending Tesla's position by highlighting BYD's significant sales drop and asserting, "This was a tough quarter for everyone."
He’s such an idiot that he can’t even tell he’s an idiot.
BYD sales dropped by 42% from last quarter. This was a tough quarter for everyone.
Amidst this, Tesla's disproportionate share of media scrutiny makes these numbers seem even worse. For example, Reuters's story on BYD's 43% decline in deliveries was less than 400 words, while Tesla’s miss on deliveries was more than 800 words. The company's every move, statement, and quarterly performance is magnified, analyzed, and debated, creating a narrative battleground that extends far beyond the confines of financial spreadsheets, production lines, or even fair play.
Tesla’s Technological Innovations Extend Beyond the Car
Tesla's commitment to pushing the boundaries of technology remains unwavering, especially in the realm of Full Self-Driving (FSD) capabilities. The company's confidence in this revolutionary technology is apparent in a new offer of a complimentary one-month trial of its FSD software.
This bold move underscores Tesla's belief in the transformative potential of its autonomous driving technology and its readiness to showcase this innovation to a wider audience, inviting them to experience the future of driving firsthand.
Moreover, Musk's pinned post on X offers a visionary glimpse into Tesla's future, emphasizing the transformative potential of Tesla's Full Self-Driving technology.
Most people still have no idea how crushingly good Tesla FSD will get. It will be superhuman to such a degree that it will seem strange in the future that humans drove cars, even while exhausted and drunk!
The Future of Tesla and the EV Market
Tesla's strategic decisions, including price adjustments and the anticipation of a slower growth year, reflect a calculated approach to these challenges. The company's focus on ramping production for the updated Model 3 and navigating unforeseen disruptions, such as the Red Sea conflict and an arson attack at its Berlin factory, speaks to the operational hurdles it faces amid a complex global environment.
For Tesla and BYD, this period is a chapter in a longer saga of adaptation, resilience, and relentless pursuit of a future where electric vehicles are at the heart of global mobility. As the dust settles on this quarter's developments, the focus inevitably shifts to the strategies, innovations, and decisions that will define the next phase of growth for these electric vehicle titans.
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On Sunday, Tesla started rolling out Full Self-Driving (Supervised) V12.3.6, the latest version of its FSD software. This update includes the highly anticipated new Autopark and High Fidelity Park Assist feature for additional vehicles. FSD v12.3.6 replaces v12.3.5 which had only been rolled out to a small portion of the fleet.
The new Autopark (tap to park) and High Fidelity Park Assist features are now available for vehicles with ultrasonic sensors (USS). Since October 2022, all Model 3 and Model Y vehicles no longer include ultrasonic sensors, instead relying solely on Tesla Vision to provide Autopilot, Park Assist, and Autopark features. However, the vision-based Autopark has been limited to the U.S. and Canada so far.
New Autopark
When driving at low speed, the new Autopark highlights potential parking spaces allowing the driver to pick their preferred spot. Tesla vehicles with ultrasonic sensors (USS) can now take advantage of the new Autopark feature, which is a significant improvement over the previous iteration.
Although the new Autopark feature is expanding to vehicles with USS, it appears to still be geographically limited to the U.S. and Canada. We expect Tesla to continue the feedback loop and release the feature in Europe and other regions in a future update.
Vehicles without USS outside of North America have never had Autopark of any form since they don’t support the older Autopark version that relies on USS and have yet to receive this latest revision of the feature.
For vehicles with the Intel-based infotainment unit, the visuals will look like the video below, where it doesn’t display a 3D environment of the vehicle’s surroundings. Instead, the visualization just highlights parking spaces available. However, the limitation for Intel vehicles is just in the visualization itself, the vehicle is just as aware of its surroundings as vehicles that display 3D renderings of objects on the screen.
With Tesla update 2024.3.25 (FSD v12.3.6), Tesla is also releasing High Fidelity Park Assist features to vehicles with ultrasonic sensors. However, as initially suspected, it’s limited to vehicles with the most recent infotainment processor that includes the Ryzen chip (MCU 3). Unfortunately, Intel Atom based vehicles don’t include the 3D visuals of High Fidelity Park Assist.
The feature provides drivers with a 360-degree 3D reconstruction of their vehicles’ surroundings while parking while traveling at low speeds. It even accurately displays lane markers in parking lots helping drivers visualize the environment around them when parking. The feature was added as a late addition to Tesla’s 2023 holiday update. However, at the time, it was limited to vehicles without ultrasonic sensors (USS).
For vehicles that have ultrasonic sensors, users will have a choice to either continue using their vehicle with USS sensors that display exact distances to objects or use the new High Fidelity Park Assist feature and forego the display of distances.
We were hoping that when Tesla finally released HiFi Park Assist to vehicles with USS, it would merge the two features and display the updated visuals with distance measurements, however, that is not the case in this update.
For owners with USS, the new Park Assist option is located under Controls > Autopilot and allows you to choose between “Standard” or “Tesla Vision.” Tesla Vision being the new HiFi Park Assist and Standard representing the USS version with arcs and measurements.
Tesla’s director of Autopilot, Ashok Elluswamy had previously set expectations and stated that HiFi Park Assist would “eventually” go to vehicles with ultrasonic sensors back in December 2023. The new Park Assist feature is available in various regions around the world, including North America and most of Europe.
Tesla continues to double down on vision and Musk revealed that it's becoming “very clear that the vision-based approach with end-to-end neural networks is the right solution for scalable autonomy”.
Tesla has started offering Enhanced Autopilot (EAP) in China via a subscription starting at 699 yuan per month — equivalent to about $98.5 USD. It’s the first time Tesla owners in the country will have access to features such as auto lane change, Autopark, Smart Summon, and others.
It’s not clear whether Tesla will begin to offer EAP as a subscription in other regions as well.
The move is seen as the first step towards the expansion of Tesla’s full self driving to China as other markets outside North America wait for the arrival of the FSD software. Yesterday, Tesla chief executive Elon Musk said the version 12 is “ready for supervised FSD in LHD countries” while RHD countries such as Australia, UK or Japan “will take a bit longer”.
FSD in China
China giant Baidu announced last Monday that it will provide all Tesla vehicles in China its latest version of Baidu Maps starting in May.
This week, Tesla celebrated its 10th anniversary in the Chinese Market where it has a total of 1.7 million owners — Tesla’s second largest market. Elon Musk recently tweeted that Tesla may soon offer full self-driving in China by saying “It may be possible very soon”.
FSD in Europe
On Friday, the Senior Advisor of the Swedish Transport Transportation, Rikard Fredriksson, shared on LinkedIn that he had been demoed the FSD technology in Germany with a Tesla employee. The moment marks the first official use of the assisted driving software in Europe.
Impressive smooth and natural driving
LinkedIn Post by Rikard Fredriksson after the FSD Demo in Germany
In the recent earnings call, Elon Musk said Tesla has over 300 million miles that has been driven with FSD v12 since it was launched just last month. He added that it's becoming “very clear that the vision-based approach with end-to-end neural networks is the right solution for scalable autonomy”.
Tesla said it has been investing in the hardware and software ecosystems necessary to achieve vehicle autonomy and a ride-hailing service. The company is confident that it can establish a scalable and profitable autonomous driving business by employing a vision-only architecture.
Tesla has recently reduced the pricing of its “Full Self-Driving” software in the US, from $12,000 to $8,000, and in Canada from CA$16,000 to $11,000. This price reduction follows a 50% cut in the subscription fee announced earlier this month.
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