Tesla’s earnings are today. The big question: Will its cheaper cars perform?
The EV world is still kind of in chaos here in the United States. While the rest of the world continues to electrify, some of our biggest EV manufacturers seem to be rethinking how to move forward with electrification. This week, General Motors killed off its EV deliveries, throwing the Canadian factory that made the trucks into chaos. Still, GM says it has some big plans for its EVs and plug-in vehicles, some of which we’re learning about today.
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In other news, Tesla reports earnings today — and all eyes are on whether its new, cheaper electric cars can pull sales out of the rut. And Uber incentivizes its drivers to switch to EVs through cold, hard cash.
Let’s go inside.
30%: New cheap Teslas may not work
Just over a week ago, Tesla announced standard versions of the Model 3 and Model Y that cost $5,000 less than the trim now known as “Premium.” Of course, Tesla’s cost-cutting may have gone too far for some people — consider the removal of the FM radio or the fake insert — but these two cars are palpably cheaper than what we’ve known.
However, not everyone is convinced that the new models are enough to lift the brand out of its sales stagnation or increase its profit margins. Basically, the odd omission of standard equipment options might just be a step too far, pushing buyers to consider premium trim anyway.
That’s not good news for Tesla, especially as it approaches earnings this week. The EV tax credit and other regulations may have boosted sales and profits for years, but both are drying up. Things could get a little complicated for Tesla Reuters:
“The removal of components is enough to make a buyer think about switching to another model,” said (Vice President of Global Vehicle Forecasting AutoForecast Solutions) Sam Fiorani.
Tesla’s gross margin on car sales has fallen over the past few years as it has cut prices and offered incentives to fend off rising competition and falling demand due to high interest rates, an aging workforce and consumer backlash against Musk’s far-right political views.
“The big question is how much demand is there at this point with their aging portfolio of vehicles?” said Garrett Nelson, chief equity analyst at CFRA Research.
The results will also show the speed at which Tesla’s key profit driver is disappearing. The U.S. government has changed policy on the regulatory credits that traditional automakers have been buying from electric vehicle companies to offset the tailpipe pollution of their gasoline-powered vehicles. The new policy means future credit sales are unlikely – and could dry up in the third quarter.
We can talk about this until we’re blue in the face here: It’s clear that if Tesla wants to continue its sales volume and profits, it’s going to need a new model. Specifically, one that was built to be lower than the (originally) premium-oriented Model 3 and Model Y. A smaller “Model 2” would likely be just what the brand needs to get more drivers into its cars and fend off the onslaught of reasonably priced global models (many of them Chinese) that are eating into Tesla’s market share.
Instead, it looks like Elon Musk and Tesla are trying to increase profitability by shifting their focus to AI and going all-out on the robotics axis. Good luck.
60%: Uber hands out cash to drivers for electric cars
If you’ve used an Uber rideshare car in the past five years or so, you’ve probably seen the Uber Green option. In some markets, this in-app option would allow a ride requester to request an electrified vehicle (often a hybrid) to take them to their destination.
Uber Green is out. Uber Electric is in. The ride-sharing app is changing the name of the feature while adding some nifty features to make the driver’s life a little easier. For starters, it’s throwing $4,000 in cash at drivers who switch from gas to electric cars. Note that this is not for all states, just California, New York, Colorado, and Massachusetts. That’s also on top of the $1,000 rebate for drivers who buy a car for Uber through TrueCar.
Interestingly, the launch of the service also includes a new ride customization feature for drivers. According to reports from The Vergewill allow drivers to precisely adapt to driving. This means that no journey will be too long given the car’s current state of charge:
The feature filters trip requests based on the EV’s battery level, so drivers can accept trips that end at a charger or avoid trips that are too long for their battery. The feature is now live in 25 countries in the US, Canada and Europe. It will now support Kia, Hyundai, Ford, Nissan, Volkswagen and Mercedes-Benz electric cars.
Uber had big plans to go completely zero-emissions by 2040. If it continues with these incentives to get drivers into EVs and out of combustion cars, it could reach that goal.
90%: It’s a big day for GM technology
The Ultium may have had plenty of missteps, but unlike other manufacturers, GM isn’t completely abandoning EVs or the lessons learned from car manufacturing. Today, the conglomerate announced some big moves for its future products, which we’re covering here at InsideEVs.
It offers a more powerful, centralized computing architecture that should create more sophisticated software-defined vehicles. From our very own Suvrat Kothari:
The automaker said it is no stranger to rolling out software updates. About 4.5 million GM vehicles can already receive updates over the air thanks to the Vehicle Intelligence Platform (VIP), which was upgraded in 2022 to include infotainment and advanced driver assistance systems (ADAS) in a single computer platform.
That was just the first step toward software-defined vehicles, the smartphones on wheels that have been talked about as a big game in the automotive industry for years. GM thinks it is now ready to go all out.
Additionally, it plans to add eyes-free and hands-free features to the Super Cruise. Check out our story by Patrick George for the full rundown:
GM said it plans to add an “eyes-free” feature to Super Cruise by 2028, meaning users will be able to take their hands off the wheel but no longer have to focus on the road when the system is on. The feature will debut on the Cadillac Escalade IQ — and that means the current model, not the new one, a GM spokesperson confirmed. This would be a true Level 3 advanced driver assistance system, a step up from the Level 2 system that currently defines Super Cruise and virtually all other systems in the US.
100%: Would you use Uber Electric?
Uber Green (and Uber Electric) came with a modest surcharge per ride for riders who are willing to accommodate an EV ride. For some, that extra dollar in fees is negligible enough to ensure that they are contributing to not harming the environment. Heck, I know people who are “EV or bust” even when it comes to renting a car for a vacation. No matter where they are, they refuse to go back on the gas, no matter the circumstances.
what about you Are you EV only for all your transportation needs? Or is a one-time carpool okay from time to time?