Is there a major change in direction? Tesla shareholders prepare for the worst performance in seven years

Today, the electric vehicle leader Tesla may face its worst quarterly financial report in seven years, but investors are more concerned about the company's strategic direction shift.

Affected by slowing demand and pricing wars, Tesla's stock price has been continuously declining this year, with poor sales performance. The market seems to have already factored in the disappointing expectations for the company's first-quarter report and is now focusing on a new issue - how will Tesla position itself: as a large electric vehicle manufacturer or as a small supplier focusing on autonomous driving technology?

According to previous reports, Tesla plans to abandon the development of the affordable Model 2 and shift its focus to developing Robotaxi. Although Musk later denied any changes to the Model 2 plan, he also emphasized that focusing on autonomous driving technology is a clear direction for the company's future development.

James Anderson, managing partner of Lingotto Investment Management, stated:

"For them, the battle between profit and sales volume is a long-term theme, and the company's strategic shift will be a significant milestone."

"The success of this strategic shift will depend on the development of autonomous driving technology."

As one of Tesla's top 15 shareholders, Tom Slater of Baillie Gifford believes that while Tesla's sales may be relatively quiet this year, investors will remain optimistic about the potential of its autonomous driving vehicles. He pointed out:

"If you look at all the reviews of their latest version of Full Self-Driving (FSD) software, you will find it is a huge leap forward."

Another shareholder, Gary Black, managing partner of The Future Fund, stated:

"Our company's actions will largely depend on how Musk schedules the timeline for Model 2. Currently, we expect production of this model to start in 2026, following Robotaxi."

On the other hand, institutional views seem generally pessimistic. Barclays analyst Dan Levy predicts that Tesla's upcoming quarterly performance will be unsatisfactory, possibly showing the lowest gross margin since early 2017, and is expected to have negative cash flow for the first time since early 2020.

Deutsche Bank analyst Emmanuel Rosner warned that Tesla's strategic shift could lead to a potential shift in investor base:

"Investors who previously focused on Tesla's electric vehicle sales and cost advantages may concede, replaced by those with a longer-term focus on artificial intelligence/technology investments."Rosner also emphasized that there are significant risks associated with going all in on autonomous driving