After Tesla layoffs, price cuts and Cybertruck recall, earnings call finds Musk focused on AI

Elon Musk doubled down on Tesla's Full Self-Driving (FSD) program and the electric car market in Tesla's earnings call Tuesday after reporting a decline in revenue.

The CEO argued that the company should be considered an artificial intelligence technology company over being an electric car manufacturer.

"If someone does not believe that Tesla can solve autonomy, I don't think they should be an investor in the company," Musk said. Musk said that the company would solve autonomy for vehicles if he left the company and that Tesla was in negotiations with an unnamed major car maker to license the FSD software.

Tesla put forward its vision of a future dominated by the electric car, as other manufacturers have shifted their focus to hybrids.

"Global EV sales continue to be under pressure as many carmakers prioritize hybrids over EVs," Tesla's investor deck read. "While positive for our regulatory credits business, we prefer the industry to continue pushing EV adoption, which is in-line with our mission."

Musk defended his commitment to the Tesla when asked by an analyst if his ownership of multiple companies was spreading him too thin.

"I make sure Tesla is very prosperous," Musk said.

Tesla earnings

Tesla reported a 9% drop in revenues compared to the first quarter of 2023. Automotive revenues dropped 13% while revenue per car dropped nearly 5%, without including the most recent round of Tesla price cuts.

The investor deck pointed towards the ramp up of the Cybertruck, an increase in research and development and the Model 3 update in the company's Fremont, California factory as causes for the revenue declines.

The company had a negative free cash flow of $2.5 billion in the quarter and net profit of $1.3 billion, down 55% from last year.

Company puts forward affordable model without details

A theme throughout the deck and call was the importance of attainability.

"We have updated our future vehicle line-up to accelerate the launch of new models ahead of our previously communicated start of production in the second half of 2025," the investor deck reads. "These new vehicles, including more affordable models, will utilize aspects of the next generation platform as well as aspects of our current platforms, and will be able to be produced on the same manufacturing lines as our current vehicle line-up."

Rueters reported that the company had moved away from plans for a less expensive model earlier this month but Musk denied that on X, his social platform formerly known as Twitter , saying "Reuters is lying (again)."

When asked directly about a $25,000 model, Vice President of Vehicle Engineering Lars Moravy did not directly answer the question and referred to earlier statements about affordability.

Musk, CFO defend layoffs

Musk and Tesla CFO Vaibhav Taneja addressed layoffs in the company on the day after a layoff notice for 2,688 employees at Tesla's Austin, Texas factory was posted and the San Fransisco Chronicle reported that 2,735 workers in the Bay Area would be laid off.

"Any tree that grows needs pruning," Tesla CFO Vaibhav Taneja said.

Last week, Tesla announced that it would cut 10% of its global workforce.

"We're not giving up anything that significant that I'm aware of," Musk said.

At the end of the call Martin Viecha, Tesla's Vice-President of Investor Relations, announced his departure from the company.

Viecha is the third executive announce a departure in just over a week after Drew Baglino, senior vice president of powertrain and electrical engineering, and Rohan Patel, vice president of public policy and business development.

Tesla 1st quarter report

Tesla Stock

Tesla ended after-hours trading up 13%, closing the regular day at $144.68 and the overtime session at $163.96.