Tesla Earnings is today, and Wedbush analyst Dan Ives has plenty of expectations for the automaker’s Q2 call.
Tesla beat expectations for deliveries and solidified a solid quarter for the Energy division with its biggest deployment to date, giving it a chance to run on Wall Street as the past month the stock is up over 36 percent.
However, there are plenty of things that need to be talked about on today’s call, especially Artificial Intelligence and Robotaxi, demand for Tesla’s EVs, and potentially some talk on the U.S. Presidential Election. Wedbush expects to hear from CEO Elon Musk on each of these topics:
AI, FSD, and Robotaxi
Wedbush said in a note to investors ahead of the call that there are plenty of things that need to be confronted on the AI, FSD, and Robotaxi subjects.
Tesla and Musk stand to benefit from a Trump presidency, Ives writes, stating that if he were to win another term, regulatory hurdles may be no more than a simple hop instead of a full-fledged jump for the automaker:
“The Street view is also that a Trump White House potential win could help Musk/Tesla on the FSD regulatory path down the road.”
Tesla will also need to bring more closure to investors regarding the delay and new timing of the Robotaxi unveiling event, which was originally scheduled for August 8.
Tesla delayed the event, Musk confirmed earlier this month, as changes to the vehicle needed to be made:
“The Street will be focused on Musk addressing the timing of Robotaxi Day, which appears to have moved from August 8th to early/mid-October. Addressing the delay in Robotaxi Day and the new timing will be important to hear on the conference call as we believe a linchpin to Tesla reaching $1 trillion+ valuation and ultimately higher over the next year is contingent on the AI/FSD story materializing into a monetization path over the coming years.”
Tesla Demand and Margins
Some analysts have already outlined their concern for margins on this call, especially as Tesla continues to spend in order to get the Cybertruck ramped up.
Ives believes Tesla should “march towards 2 million units annual trajectory” as “clear momentum” has pushed the automaker into a strong position moving forward.
He also commented on the “sweet spot” for margins:
“Auto gross margins (ex credits) in the 16.5%-17% range would be the sweet spot and should mark the beginning of an upward climb into the next few quarters as price cuts appear to be mostly done with price increases in some regions/models seen the last few weeks. A major focus of the conference call will be the overall demand environment, China growth in a competitive/price cut backdrop, and the outlook for the rest of the year.”
U.S. Presidential Election
Ives believes Musk will comment on the U.S. Presidential election as the race has major implications not only for Tesla specifically, but for the EV sector in general.
Musk has publicly supported former President Donald Trump, and although rumors of a $45 million a month donation to the Trump campaign circulated, Musk denied the claims.
However, he has stated explicitly that Trump will get his vote in November.
Ives explains the importance of this being talked about during the call this evening:
“We also expect Musk to address the US Presidential Election with his firm backing for Trump and now a Harris nomination likely for the Democrats heading into November. We continue to believe in the scenario of a Trump win this would be negative for the EV industry but positive for Tesla as removing the tax rebates/incentives would give Musk and Tesla an advantage. The Street view is also that a Trump White House potential win could help Musk/Tesla on the FSD regulatory path down the road. On the other hand a Harris ticket would be a positive for Detroit (GM, Ford, Stellantis) and the EV industry and in theory also help Tesla, although this all remains up for debate among investors. We expect Musk to discuss some of his thoughts around this hot button topic on the conference call tomorrow.”
You can read what investors and analysts want to know on the call here:
Tesla Earnings is tomorrow – Here’s what analysts think you should be looking for
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