CEO Elon Musk Just Delivered Bad News to Tesla Shareholders and Vehicle Owners

The electrical conveyance and robotaxi institution Tesla (NASDAQ: TSLA) reported its first-quarter net study past night, followed by a league telephone led by Founder and CEO Elon Musk.

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Investors are mostly focused connected the burgeoning robotaxi concern and afloat self-driving (FSD) technology. I thought Musk delivered atrocious quality to shareholders connected astir fronts, though shares are lone down astir 2.5% arsenic of 12:45 p.m. ET, truthful investors whitethorn not person been wholly amazed by immoderate of the news.

After all, Musk is known to person pushed timelines connected galore occasions.

The institution raised its guidance for full-year superior expenditures, lowered expectations for the robotaxi fleet, and besides noted that Tesla owners with dated vehicles volition request to upgrade their hardware if they privation to usage FSD software, which inactive does not look acceptable to beryllium utilized afloat unsupervised, astatine slightest astatine scale, according to Musk.

Here is what investors request to know.

While intertwined, Tesla's robotaxi fleet and FSD correspond antithetic aspects of the business: idiosyncratic owners tin acquisition FSD bundle for their Teslas, portion the robotaxi fleet aims to run arsenic an autonomous ride-hailing fleet.

On Tesla's first-quarter net call, Musk much oregon little acknowledged that Tesla's unsupervised FSD exertion is inactive not rather acceptable for deployment astatine scale, whether to individuals oregon the robotaxi fleet.

"I deliberation it's not going to marque consciousness for america to deploy unsupervised FSD oregon Robotaxi astatine ample standard erstwhile we cognize that determination are large architectural improvements to the bundle that tin amended safety," Musk said. "I deliberation we're going to privation to decorativeness penning that software, validate it, and merchandise it earlier going to large-scale unsupervised FSD, depending connected what ample standard means."

Furthermore, Musk confirmed that Tesla owners with Hardware 3 (HW3), installed successful galore vehicles betwixt 2019 and 2023, volition request to upgrade that hardware to efficaciously deploy FSD.

This includes implementing a caller strategy with much representation bandwidth and replacing the computers and cameras. Musk said the institution is offering HW3 conveyance owners a discounted trade-in for cars that person Hardware 4, arsenic good arsenic the accidental to upgrade the conveyance by replacing the hardware.

The task is ample capable that Musk said Tesla volition request to acceptable up microfactories successful large metropolitan areas.