Earnings call educates Wall Street! Musk: If you don't agree that Tesla is an autonomous driving company, then you shouldn't buy the stock

On Tuesday, April 23, after the U.S. stock market closed, Tesla released its latest "report card". Against the backdrop of intensifying competition in the new energy vehicle market, Tesla's first-quarter revenue saw the worst decline in 12 years, with profits halved and core automotive business revenue declining by 13%.

Despite both revenue and profits falling below expectations, during the earnings call, Tesla CEO Elon Musk once again emphasized to Wall Street investment banks that Tesla is now an AI company. "If someone does not believe that Tesla can solve the Full Self-Driving (FSD) problem, they should not be Tesla investors."

Musk stated, "If investors do not experience FSD firsthand, they cannot truly understand this company." "I strongly recommend that anyone considering buying Tesla stock should actually drive a car with this software and experience the latest version of FSD."

At the same time, Musk mentioned that in the future, Tesla will operate millions of "robotaxi" vehicles, forming a robotaxi fleet similar to Uber's ride-hailing service. Tesla owners will also have the opportunity to rent out their Tesla vehicles to provide ride-hailing services, with plans to reveal more details about Robotaxi in August.

Musk also pointed out that negotiations are currently underway with a major automaker for the licensing of the "Full Self-Driving" system (FSD), stating that it is "very likely" to sign a licensing agreement this year. However, Tesla management mentioned that even if a licensing agreement is reached this year, it will take 3 years to integrate it into other vehicles.

Meanwhile, Tesla also released a preview version of calling a self-driving car through the Tesla app on the social media platform "X".

Electric vehicle analyst and Tesla investor Sawyer Merritt stated that data shows FSD is rapidly gaining popularity, with Tesla owners driving an average of about 250% more miles per day in FSD mode compared to three months ago, reaching 14.7 million miles.

At the current growth rate, Tesla's cumulative FSD mileage can increase by 1 billion miles every 68 days. In comparison, it took Tesla 3.5 years to reach the first 1 billion miles of FSD mileage

Another netizen indicated that Tesla has already launched its robot taxi hailing application, and FSD + Optimus (humanoid robot) will be a huge cash cow.

Musk Fully Bets on FSD

During the conference call, Musk spent most of the time discussing Tesla's FSD technology and future AI plans.

In November last year, Tesla began rolling out the Full Self-Driving (FSD) V12 version to employees. FSD V12 is considered a significant leap for Tesla in autonomous driving technology, as it is the first time Tesla has started using neural networks for vehicle control, including steering, acceleration, and braking.

Starting from March 16, 2024, Tesla began pushing the latest FSD Beta V12.3 advanced driver assistance system to FSD orders and subscribers across the United States, and on April 13, reduced the monthly subscription fee by 50% to $99.

Currently, Tesla's FSD is priced at $12,000 for a lifetime purchase or $99 per month in North America.

Musk believes that the $99/month FSD subscription service is a way for the company to make it easier for customers to access FSD. Tesla will launch Robotaxi later this year, which he refers to as "Cybercab," and revealed that Tesla is in talks with a car manufacturer regarding FSD licensing.

Musk firmly believes that autonomous taxis will disrupt the entire industry, freeing people from the burden of driving. Similar to ride-hailing services today, you can summon an autonomous taxi whenever you need it, it will take you to your destination, and then pick up the next passenger.

Musk believes that Tesla will become a $10 trillion market cap company with autonomous taxis, and is pushing for new car designs and new factories to accommodate these two types of vehicles: production lines for affordable cars that can also be used to produce autonomous taxis.

Some institutional investors bullish on Tesla believe that the autonomous taxi platform business is expected to significantly boost the company's profit levels. The gross margin of the deferred revenue portion achieved by FSD is as high as 90%, and the future FSD software service business is expected to become the company's biggest highlightHowever, some investors are gradually losing confidence. Bloomberg analyst Steve Man stated that institutional investors are losing patience, and the initial hype surrounding fully autonomous driving and robot taxis has weakened, with the pendulum swinging in the opposite direction.

A survey conducted by Canadian investment bank Canaccord Genuity showed that even after experiencing FSD technology this year, consumers' willingness to pay has not significantly increased. The survey results indicated that among the 60.2% of participants who tried FSD technology this year, only 6.3% were willing to pay $12,000 for it, while approximately 80.6% were willing to pay $10,000 or less