Tesla CEO Elon Musk reveals optimistic projections at the company’s shareholder meeting, hinting at a significant increase in margins to come, especially on its electric vehicles.
At Tesla’s 2023 Annual Meeting of Shareholders, CEO Elon Musk shared his thoughts on the company’s future margins. Tesla’s ability to maintain impressive margins, despite challenges in the auto industry, has been a key factor in its ability to consistently cut prices this year.
Even after multiple price cuts, Tesla continues to post strong margins and profits, although improvements are possible. The CEO addressed the issue of margins for Tesla’s automotive and energy divisions, highlighting potential developments ahead. According to him, once full autonomy is achieved through the Full Self-Driving capability set, his company could make record margins on its vehicles.
Also read – The $25,000 Tesla would be a “small Model Y” produced at 4 million units per year
Elon Musk wants to push Tesla’s margins to 80% in the next few years
When asked to estimate the “maximum” margins for Tesla’s automotive and energy segments, Musk hinted the company will raise prices after achieving fully self-driving. ” If you have a car that costs the same price and has, say – I don’t know – a margin of 20 or 25%, and suddenly is capable of being used five times as much, then you could have margins of 80 %, and the income would be multiplied. That’s why I say it’s probably going to be the biggest step change in asset values in history. “, he explains. Note, however, that these figures were speculative and subject to change.
Musk pointed to Tesla’s unique approach to autonomous driving, which relies primarily on camera-based vision systems supplemented by neural networks and artificial intelligence (AI). Tesla’s ambitious plans for full self-driving and a future fleet of robotaxis have been discussed for years, although there have been significant delays.
However, Musk remains convinced that Tesla’s advances will revolutionize the automotive industry and will increase the value of owning a Tesla vehicle. Indeed, if this one earns you money by being part of a fleet of self-driving vehiclesthis could allow the manufacturer to drastically increase its prices, and thus make more margin on each of the vehicles.
For now, the timeline to achieve full autonomy and self-driving remains uncertain, and patience is in order. Regarding Tesla Energy, Musk estimated that margins could peak around 20-25%, with the potential to reach around 30%.