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Tesla drops delivery goal of 20 million vehicles a year from latest report

Published 2024-05-23, 10:36 a/m
© Reuters. FILE PHOTO: A parking lot of predominantly new Tesla Model 3 electric vehicles is seen in Richmond, California, U.S. June 22, 2018. Picture taken June 22, 2018. REUTERS/Stephen Lam/File Photo

By Akash Sriram and Hyunjoo Jin

(Reuters) -Tesla has left out its goal of delivering 20 million vehicles a year by 2030 in its latest impact report published on Thursday, another sign the company was moving away from electric cars as it shifts focus to robotaxis.

CEO Elon Musk had said in 2020 that Tesla (NASDAQ:TSLA) aspired to sell 20 million vehicles by the end of the current decade - twice as many as those sold by Toyota, the world's largest automaker. It had reiterated the goal in its 2021 and 2022 impact reports.

But the company changed tack recently, dropping plans to produce an all-new model that was expected to cost $25,000, while touting autonomous driving technology as its main source of growth. It plans to host a launch event for its robotaxi on Aug. 8.

Robotaxis and the company's humanoid robot Optimus will be "incredibly profound" for Tesla, Musk said on Thursday through a video-link at the annual "Viva Technology" conference in Paris.

He declined to answer a question on the timeline for Tesla's low-cost cars at the event.

Musk said in April that Tesla plans to bring forward the launch of new models, including affordable cars, to as early as late this year. But Tesla said it plans to use current product lines for new affordable vehicles instead of new facilities, making a strategic change that would result in smaller cost reductions than expected and modest volume growth.

Reuters first reported that Tesla shelved its next-generation, cheaper electric cars in favor of robotaxis.

"A healthy proportion of Tesla's 2030 goal would have been the company's hitherto longstanding promise to introduce affordable cars at the $25,000 mark," said Sandeep Rao, senior researcher at Leverage Shares, which owns Tesla shares.

"While the company currently promises to introduce 'more affordable' models in the future, this doesn't necessarily equate to cars costing $25,000 being rolled out."

Tesla shares were down 3.5% on Thursday, falling about 30% this year.

Slowing growth in EV demand and tough competition have hit demand for Tesla's vehicles. Its sales grew 38% in 2023, below the long-term annual growth target of 50% and Tesla warned in January that growth in deliveries would be notably lower this year. Tesla posted its first year-on-year sales drop in nearly four years during the January to March period this year.

In a bid to restructure, Tesla laid off over 10% of its staff this year, including disbanding the Supercharger team.

© Reuters. FILE PHOTO: A parking lot of predominantly new Tesla Model 3 electric vehicles is seen in Richmond, California, U.S. June 22, 2018. Picture taken June 22, 2018. REUTERS/Stephen Lam/File Photo

The 2023 impact report also showed Tesla's fast-charging network had an uptime of 99.97%, the highest in at least five years. However, some analysts and former employees have warned the division's performance could suffer due to the layoffs.

Tesla also did not compare the diversity of its workers to other companies in the report and it no longer states that a majority of its employees are from underrepresented groups.

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