After its latest quarterly financial report, Tesla’s stock saw a significant surge of more than 12 percent during after-hours trading, despite the company falling short of analysts’s projections of earnings per share. This boost came even as the electric car manufacturer faced a 42 percent drop in its year-to-date performance.
Tesla CEO Elon Musk’s discussions about the forthcoming release of Tesla’s Robotaxi and the efforts to produce more affordable electric vehicles likely contributed to the post-earnings stock rally.
Tesla reported revenue of $21.30 billion, falling short of the expected $22.15 billion.Revenue decreased from $23.33 billion in the previous year and from $25.17 billion in the fourth quarter. Net income also experienced a 55 percent decline, to $1.13 billion, equivalent to $0.34 per share, compared to $2.51 billion, or $0.73 per share, in the corresponding period last year.
Key points from the earnings call include Tesla’s accelerated timeline for producing new vehicle models, with plans to begin production as early as late 2024 or early 2025, ahead of previous projections. These upcoming models, including more affordable options, are expected to be manufactured on existing production lines, potentially easing concerns about production costs and schedules.
Elon Musk disclosed discussions with a major car manufacturer regarding the licensing of Tesla’s full self-driving (FSD) technology, foreseeing a potential deal within the year. He also unveiled details about Tesla’s Robotaxi service, slated to launch on Aug. 8, which forms part of the company’s strategy to establish a self-operating taxi network.
“There'll be some number of cars that Tesla owns itself and operates in the fleet,” Mr. Musk said during the earnings call.
Musk estimates there will be above 7 million of these vehicles at the beginning and eventually tens of millions.
“Then there'll be a bunch of cars where they’re owned by the end user. But that end user can add or subtract their car to the fleet whenever they want. And they can decide if they want to only let the car be used by friends and family, or, only by five-star users, or by anyone, at any time. They could have the car, come back to them and be exclusively theirs, like an Airbnb, you could rent out your guest room or not, anytime you want,” Mr. Musk said.
Mixed Responses
Analysts’ reactions varied, with some applauding Tesla’s commitments to affordability and future investments, while others expressed skepticism regarding the delivery of promised initiatives, such as the robotaxi fleet.Senior private wealth manager of Spartan Capital Shoug Mayson considered the jump in stock value “a shock.”
“All the other numbers were bad,” Mr. Mayson told The Epoch Times.
Robotaxi Narrative
Mr. Musk, however, is certain that the Robotaxi idea will prevail and even made an analogy between Nokia mobiles and smartphones.Mr. Mayson, a former financial adviser at Santander and Merrill Lynch, believes that Tesla is beating its competitors in data collection.
“Tesla has an advantage because AI only gets smarter when it has more data to go off of. They were the first movers. They have two million miles of driving data per day,” Mr. Mayson said. “So they’re massively smarter than anyone else that can compete with them because It has 51 percent of the entire electric vehicle market. And now with the two million miles per day, the AI is getting like filled with getting smarter and smarter at a much rapid rate.”
Regarding regulatory concerns, Mr. Musk expressed confidence that significant barriers to the deployment of autonomous vehicles would not arise. He argued that once it is demonstrated that self-driving cars are safer than those operated by humans, arguing that failure to embrace autonomy would be detrimental to safety.
