Tesla Stock: Earnings Fall 43% In 'Difficult Operating Environment'; Elon Musk Touts Autonomy (Live Coverage)

Tesla (TSLA) announced mixed second-quarter earnings and revenue late Tuesday, with earnings sinking more than 40% while sales came in above expectations. Tesla stock fell in extended trade, with Chief Executive Elon Musk speaking on the conference call. Musk didn’t provide a lot new on the call, continuing to express optimism about self-driving, the Optimus robot and robotaxi.

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Tesla’s Robotaxi Is Delayed. Will It Make A Difference For Tesla Stock?

6:37 p.m. ET

Trump Ending EV Subsidies Would Be ‘Devastating For Our Competitors’

The earnings call ended with a question from the Wells Fargo analyst about what will happen if former President Donald Trump wins the 2024 election and does away with the Inflation Reduction Act, including the EV subsidies.

Musk, who has endorsed Trump, says that would be “devastating for our competitors” but that it would impact Tesla only slightly. He added that in the long term it could actually help the company.

The Tesla head then reiterated that he believes Tesla’s value is tied to autonomy and that if an investor does not believe Tesla will solve vehicle autonomy, then they should “sell their Tesla stock.”

“All these other questions are in the noise,” he said.

Tesla stock, which is still trading, ended the call down roughly 7%.

6:14 p.m. ET

Adam Jonas On Tesla Earnings

Analyst notes are starting to come out.

Adam Jonas, Morgan Stanley’s high-profile autos analyst and a Tesla bull, writes that there is “no big change in outlook” and that Tesla is “muddling through the EV recession.”

Jonas says that the 2024 outlook is “largely identical reiteration of language from the previous quarter’s outlook” and that this “should keep consensus little changed.”

“We think this quarter’s stock reaction will come down to the tone and content of the analyst conference call which we expect to may help set the stage for a Master Plan 4 unveil later this year,” Jonas writes.

6:01 p.m. ET

Tesla Stock Extends Losses On Call

Tesla stock, down 4% heading into the conference call, is now down more than 6%.

5:55 p.m. ET

Nvidia AI Chips Hard To Get

The Tesla chief is concerned about the demand for Nvidia GPUs.

“What we are seeing is that the demand for Nvidia hardware is so high that it’s often difficult to get the GPUs. I’m quite concerned about actually being able to get state of the art video GPUs when we want them.

“I think this therefore requires that we put a lot more effort on Dojo in order to ensure that training capability that we need,” Musk said.

Musk had downplayed Tesla’s in-house Dojo chip effort in prior conference calls.

Musk, in response to a question, confirmed that Tesla redirected some Nvidia GPUs to his sister companies because there was no place to put them.

5:49 p.m. ET

Musk Says True Self-Driving ‘Possible’ This Year

Musk says that it is “possible” for unsupervised full self-driving by the end of 2024. “I would be shocked if we cannot do it next year.”

Musk’s comments are in response to a question when robotaxi will be on the road for riders.

The Tesla CEO has said for almost a decade that he expected true self-driving “this year.”

5:44 p.m. ET

Musk: Robotaxi Event Oct. 10

Musk kicked off the earnings call by saying that executives “won’t get too much into the product roadmap here because that is reserved for product announcement events.”

The Tesla chief adds that the EV giant is on track to deliver a more affordable model in the first half of next year.

On the robotaxi, Musk said the unveiling event has been pushed to Oct. 10. He had already confirmed that the event would be pushed back from Aug. 8.

“I wanted to make some important changes that I think would improve the vehicle, the sort of the robotaxi, the main thing that we’re going to show and we’re also going to show off a couple of other things,” Musk said.”So moving it back, moving it back a few months, allowed us to improve the robotaxi, as well as add in a couple other things for the product unveil.”

5:33 p.m. ET

Conference Call Starts: What To Look For

The conference call is getting started. Key questions looking to be answered, include timing around the $25,000 vehicle product and when a robotaxi could hit the roads.

Investors should also look for information on vehicle pricing, the 2024 election and auto gross margins.

As an aside, Tesla also reported Cybertruck production is on track to achieve profitability by end of year.

5:28 p.m. ET

Waiting On The Tesla Earnings Call

CEO Elon Musk will take center stage on the Tesla earnings conference call set to start at 5:30 p.m. ET, though Tesla events sometimes get off to a late start.

Tesla stock is down 4% following the earnings miss, but Musk’s comments could easily swing shares.

Tesla Earnings Tumble

The electric-vehicle giant reported Tuesday that earnings fell 43% to 52 cents per share. Meanwhile, quarterly revenue totaled $25.5 billion, up 2% vs. the year-earlier quarter. Analysts had predicted Tesla would report earnings of 61 cents a share with sales sliding to $24.54 billion, according to FactSet. However, Wall Street saw revenue increasing slightly to $25.05 billion.

Tesla reported Tuesday it “achieved record quarterly revenues despite a difficult operating environment.” Meanwhile, Tesla’s gross margins fell 23 basis points to 18%. Auto gross margins, excluding regulatory credits and leases, came in at 15.1%, inline with analyst expectations, according to FactSet.

Looking ahead, Tesla said in the earnings report that its vehicle volume growth rate in 2024 “may be notably lower than the growth rate” last year. The EV giant added that growth in its energy storage business should outpace its automotive segment.

However, Tesla added its plans for new vehicles, including affordable models, remain on track to start production in the first half of 2025. That suggests that mass production won’t start until late 2025 at the earliest.

Tesla Stock

Tesla stock dropped more than 3% after the close but before the conference call. That followed a 2% drop to 246.38 during the regular market session on Tuesday, even as vehicle registration data out of China showed a solid start to the third quarter.

Tesla stock has a 271 handle buy point on a consolidation going back several months to a year, according to MarketSurge chart analysis. After earnings, investors could use a break of the handle’s downtrend as an aggressive entry.

Investor sentiment has been upbeat, with Tesla stock surging more than 25% in July after the EV maker announced a surprise second-quarter beat in vehicle deliveries earlier this month.

CEO Elon Musk In Focus

During the conference call, the focus, as usual, will be on Chief Executive Elon Musk. Investors will seek insight on robotaxis, future cheaper models and the Optimus humanoid robot. Also expected is word on artificial intelligence and autonomous driving.

Analysts and investors alike are hungry for information on Tesla’s robotaxi reveal, which had been slated for Aug. 8 but has been reportedly pushed to October. Musk confirmed the event postponement with a July 15 post on X. He wrote there is an “important design change to the front and extra time allows us to show off a few other things.”

Tesla reported in its earnings release the timing of robotaxi deployment depends on “technological advancement and regulatory approval.” The EV giant added it is “working vigorously on this opportunity given the outsized potential value.”

The company added that the Optimus robot is performing its “first task handling batteries” at one of its facilities.

Tesla Stock Performance

Shareholders recently voted in favor of giving Musk his 2018 $56 billion pay package and reincorporating the company in Texas, moving it from Delaware.

Tesla stock ranks third in the 35-member IBD Auto Manufacturers industry group. The stock has an 87 Composite Rating out of a best-possible 99. Shares have a 91 Relative Strength Rating and a 62 EPS Rating.

Please follow Kit Norton on X @KitNorton for more coverage.