The billionaire CEO has unshakeable confidence that Tesla will maintain its dominant market position.
This earnings call had a bit of everything: fighting spirit, joy, relief.
And a confidence boost for the CEO from once again proving his detractors wrong.
On Jan. 25, Elon Musk and Tesla had come to slay. They came out swinging, sure that the punches they were about to throw were going to land, and hurt a lot.
They made clear their confidence that they’d maintain their dominant market position and technological edge in electric vehicles.
Here’s the boss’s initial uppercut.
“The most common question we’ve been getting from investors is about demand,” Musk began. “So I want to put that concern to rest. Thus far in January, we’ve seen the strongest orders year-to-date than ever in our history.
“We currently are seeing orders at almost twice the rate of production. So, I mean that — it’s hard to say whether that will continue twice the rate of production, but the orders are high.”
As a result, Tesla has raised the Model Y price, the Techno King added. “So we think demand will be good despite probably a contraction in the automotive market as a whole.”
Indeed, the base price of the Model Y Long Range SUV in the U.S. had fallen to $52,990 but now has risen $500, or 1%, to $53,490, according to the firm’s website.
Musk Roasts the Analysts
Musk targeted the financial analysts, who were warning that the company’s Jan. 12 price cut, 7% to 20%, for Tesla cars would shrink profit margins.
Musk, who sees himself as a CEO close to the people, then borrowed a line of attack that politicians like. He even appeared as if he were running for office.
He explained that in fact his concern was to make Tesla cars accessible to everyone, the wealthy as well as the less fortunate. His favorite enemy, liberal Sen. Bernie Sanders (I-Vermont), might even applaud.
“Price really matters. I think there’s just a vast number of people that want to buy a Tesla car but can’t afford it,” the billionaire said. “And so, these price changes really make a difference for the average consumer.”
“Sometimes for those — for people who are well — who have a lot of money, they sort of forget about how important affordability is. And it’s always been our goal at Tesla to make cars that are affordable to as many people as possible. So I’m glad that we’re able to do so. And yes, so I think it’s a good thing, all things considered.”
Musk is the second richest man in the world on paper with a fortune valued at $146 billion as of Jan. 25, according to Bloomberg Billionaires Index.
Now it’s the turn of his so-called competitors, the billionaire seems to think. He has heard them say for several months how much they aspire to play the leading roles in the EV segment.
He heard them quietly outlining their plans to oust Tesla. Ford, General Motors, Volkswagen, Honda, Nissan, BMW, Mercedes-Benz, Rivian and others say they are gaining market share.
Musk Suggests Tesla Has No Big Threat
He heard analysts predict that Tesla’s dominance is waning and will come to an end in the next few years. Musk listened to all this in silence. But he seems unable to hold back anymore.
“I’m curious how you see the current competitive landscape changing over the next few years. And who do you see as your chief competitors five years from now?” asked Canaccord analyst George Gianarikas.
The answer was scathing.
“Five years is a long time,” Musk responded. “As with the Tesla order part, AI team, until late last night, and just we’re asking: ‘so who do we think is close to Tesla with — a general solution for self-driving?’ And we still don’t even know really who would even be a distant second. … I don’t think you could see a second place with a telescope. At least we can’t.”
In the total vehicle space, “I think we have a lot of respect for the car companies in China. They are the most competitive in the world. That is our experience,” the serial entrepreneur continued.
“They work the hardest and they work the smartest. So a lot of respect for the China car companies that we’re competing against. And so, if I would have guessed, there are probably some company out of China as the most likely to be second to Tesla.”
Tesla accompanied this bombast with spectacular announcements. The firm will increase its production “as quickly as possible” in accordance with its longstanding objective of growth of 50% per year over several years.
The company, which produced almost 1.37 million vehicles in 2022, plans to make 1.8 million this year despite a recession looming on the horizon. Musk went so far as to say it’s even possible that Tesla will produce 2 million vehicles. The company is therefore accelerating operations.
Last year, Tesla posted net income of $12.6 billion, more than double the $5.5 billion recorded in 2021. Annual revenue was also at an all-time high, coming in at $81.5 billion, up 51% year-on-year.
The earnings call, which lasted a little over an hour, was also marked by further bravado linked to Twitter, the social network that Musk bought in late October for $44 billion.
The tech mogul took particular offense to being asked if his omnipresence and activism on Twitter were harming the Tesla brand, a criticism from some shareholders in recent months.
“Let me check my Twitter account. Okay, so I’ve got 127 million followers, and it continues to grow very rapidly. That suggests that, you know, I’m reasonably popular,” the billionaire pointedly replied.
Bravado and bombast to the end.
“In Tesla’s Super Bowl, Musk & Co. delivered in epic fashion,” Wedbush analyst Dan Ives lauded.
Musk seems to have his mojo back.