Elon Musk is years behind on his ambition to render Tesla Inc.’s cars fully autonomous. He’s now saying in no uncertain terms that he’s willing to bet the company’s profit margins on making it happen.
Musk said on a conference call last week that Tesla has the wherewithal to sell cars at “zero profit” and then earn huge sums later off driverless software.
The trouble with that for investors? His predictions since at least 2019 that autonomous Teslas are just around the corner haven’t panned out.
“We’re the only ones making cars that technically we could sell for zero profit for now, and then yield actually tremendous economics in the future through autonomy,” Musk said April 19. “I’m not sure how many of you will appreciate the profundity of what I’ve just said, but it is extremely significant.”
The challenge Musk has had turning driverless visions into reality isn’t stopping him from going forward with markdowns that threaten to set off a price war.
The Austin, Texas-based company has lowered the cost of its top-selling Model Y by 29 percent in the span of just a few months. That’s dented the company’s margins and spooked investors concerned about deteriorating profits.