Listen to a recap of the top stories of the day from Electrek. Quick Charge is now available on Apple Podcasts, Spotify, TuneIn and our RSS feed for Overcast and other podcast players.

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Stories we discuss in this episode (with links):

Tesla may start selling its Optimus humanoid robot next year, says Elon Musk

Tesla is in talks with ‘one major automaker about licensing Full Self-Driving’

BETA hits its latest eVTOL milestone, transitioning mid-air with a pilot onboard [Video]

Tesla announces change of plans to build cheaper electric cars

Tesla teases its upcoming Uber-like self-driving ride-hailing app

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Amid a shifting strategy, Ford (F) reported first-quarter earnings Wednesday, beating analyst expectations. However, due to fierce pricing pressure, Ford’s EV revenue fell 84% in Q1 2024.

Ford shifts EV strategy amid sales upswing

Despite EV sales surging 86% to 20,233 in the first three months of 2024, Ford is pulling back. All Ford electric models saw double (or triple) digit sales growth.

The F-150 Lightning remained the top-selling electric pickup in the US, with 7,743 models sold, up 80% over last year. Ford’s Mustang Mach-E was the second best-selling electric SUV in the US, with 9,589 vehicles delivered, up 77% over Q1 2023.

Meanwhile, Ford’s commercial Pro unit continues to appear as a dark horse for the automaker, with EV adoption rising 40%. Ford E-Transit sales were up 148% in Q1, with 2,891 units sold.

Ford’s growth propelled it to second in the US EV market (if you don’t include combined Hyundai and Kia sales).

The sales surge comes after Ford introduced significant price cuts and savings on the Mach-E and Lightning earlier this year.

Despite rising EV sales, Ford announced it is pushing back EV production at its BlueOval City facility to 2026. It is also delaying the launch of its three-row electric SUV to focus on smaller, more affordable EVs.

In the meantime, Ford said it would introduce more hybrids to the mix as it develops its next-gen electric models.

Ford’s Model e EV unit had a net loss of around $4.7 billion last year with “extremely competitive pricing” and new investments. Meanwhile, EBIT loss slipped to $1.6 billion in Q4.

Analysts expect Ford to report $40.10 billion in revenue in its Q1 2024 earnings report. Ford’s Model e, EV unit, is expected to generate around $24.5 billion in revenue with an EBIT loss of $1.65.

Ford Q1 2024 earnings results

Ford reported first-quarter 2024 revenue rose 3% to $42.8 billion, topping estimates of around $40.10 billion. Ford also topped adjusted EPS estimates with $0.49 per share in Q1 vs $0.42 expected.

The automaker posted net income of $1.3 billion, down from $1.8 billion last year. Adjusted EBIT fell 18% to $2.8 billion due to lower prices and the timing of the F-150 launch.

Ford Blue, the company’s ICE business, saw revenue fall 13%, again due to the new F-150 launch.

Ford Pro was the growth driver, with volume and revenue up 21% and 36%, respectively. The commercial and software business had an EBIT margin of nearly 17%, with first-quarter revenue of $18 billion.

Meanwhile, Ford Model e revenue slipped 84% due to “industry-wide” pricing pressure. With lower prices, the unit’s EBIT loss increased YOY to $1.3 billion. That’s about a $64,000 loss for every EV sold in Q1. However, this is still down from the $1.6 billion EBIT loss in Q4 2023.

Ford expects EV costs to improve going forward, but it will be offset by top-line pressure.

The automaker is maintaining full-year EBIT guidance, expecting to hit the higher end of the $10 billion to $12 billion range. The company now expects to generate between $6.5 billion and $7.5 billion in adjusted free cash flow, up from the previous $6 billion to $7 billion.

According to Ford, the updates reflect recent cost-cutting actions, like the delayed EV investments. Ford’s update comes after rival GM also raised full-year guidance this week.

Meanwhile, Ford is releasing a new brand campaign called “Freedom of Choice” to promote its gas, hybrid, and EV lineup amid the strategy shift.

Tesla’s stock (TSLA) surged 12% today, one of its best days in a long time, as Elon Musk tries to position Tesla to ride the artificial intelligence wave.

In a rare occurrence, Tesla had a pretty bad miss on expectations for both revenue and earnings with its financial results in Q1 2024.

Despite the miss, Tesla’s stock surged 12% today. That’s quite the anomaly. So, what gave investors more confidence in Tesla?

There were a few important positive points in Tesla’s results.

First off, Tesla’s automotive gross margins virtually stayed the same despite further price costs, the Cybertruck ramp, and the Model 3 Highland ramp in Fremont. The company confirmed that if you remove those, margins did improve in Q1.

There’s also Tesla’s announcement that it changed its plans about how to bring cheaper vehicles to market. As we previously reported, Tesla postponed NV9, a new “$25,000 Tesla” based on the automaker’s new “unboxed” manufacturing technology.

Many investors and analysts were concerned about this, as a large percentage of Trsla’s expected growth over the second half of the decade was based on this model.

Now, Tesla has confirmed that its change in strategy still involves cheaper model, albeit likely not a $25,000 one, but they will be built on existing manufacturing lines. This was a big positive for investors – although the plan is currently light on details.

The third factor that is likely greatly contributing to Tesla’s stock having one of its best days in a while is the AI wave.

As we previously reported, Musk is virtually putting Tesla all-in on Robotaxi. The CEO again reiterated that if you don’t believe that Tesla can solve autonomy, you shouldn’t own the stock.

Musk is trying to position Tesla to ride the AI wave that is currently taking over the tech industry.

An interesting new thing that the company did with these earnings is that it released its AI training compute capacity:

This is truly impressive and still growing. As we previously reported, Tesla is currently building a massive 100 MW data center with NVIDIA hardware at Gigafactory Texas, which the company is hoping to bring online this August.

Tesla plans to use this AI training capacity to train its Full Self-Driving system with the millions of miles being driven with the “supervised” version of the system:

The data is also accelerating on that front with the release of v12 and the FSD one-month free trial.

While many people remain skeptical, it does appear that Tesla is gaining credibility regarding AI and its self-driving effort, which is contributing to the stock surge.

Electrek’s Take

If you have been following my pieces, you know that I haven’t been the biggest fan of FSD, but I’ve been impressed with v12 so far.

Things could get interesting fast.

Tesla now has the AI training capacity to compete with the biggest AI players and it is growing fast. The automaker is taking a similar approach as it did with battery cells: buying everything you can get your hands on from suppliers and building your own.

For batteries, that means buying from Panasonic, LG, CATL, etc, and building 4680 cells itself.

For AI training compute, it means buying servers from NVIDIA and building Dojo.

It worked for batteries and it could work for AI training also. I think Tesla deserves a meaningful credibility bump in the self-driving space with v12.

Honestly, if I see decent improvements over the next few updates, I might become a true believer. I had FSD Beta on my car for the better part of 2 years and saw very few improvements. v12 alone felt like a 20-30% overall improvement and I’m now way more confident when using FSD.

With that said, it’s important to remain extremely vigilant when using FSD. You need to be ready to take control at all times.

And at the risk of repeating myself for a thousand time, Tesla should release FSD disengagement data.