Tesla (TSLA) released its mixed second-quarter results after the market closed on Tuesday, indicating both positive and negative aspects of its performance.
The company highlighted its trajectory towards the production of new vehicles, including a more affordable electric vehicle (EV), expected to begin in the first half of 2025. However, Tesla also tempered expectations for growth in 2024, forecasting a “notably lower” growth rate compared to what was achieved in 2023.
For the second quarter, Tesla reported revenue of $25.05 billion, slightly above the $24.63 billion expected by analysts, according to Bloomberg consensus, and an increase from the $24.93 billion reported in the same quarter the previous year. However, the company fell short on earnings, posting an adjusted EPS of $0.52, compared to the $0.60 anticipated, with a non-GAAP net income of $1.8 billion. The market reacted negatively to these mixed results, with Tesla’s shares dropping about 7% in pre-market trading on Wednesday.
In its Q2 earnings report, Tesla confirmed that its plans for new vehicle production are on track, with a focus on more affordable models expected to start production in early 2025. These new vehicles will incorporate elements from Tesla’s next-generation platform as well as features from its current platforms. The company emphasized that these new models would be manufactured on the same production lines as its existing vehicle lineup, aiming for efficiency and cost-effectiveness.
The anticipation of a more affordable EV model is significant, as analysts and industry experts believe it could significantly boost EV sales. This sentiment aligns with previous statements by Tesla CEO Elon Musk, who has highlighted the importance of a cost-effective EV for broader market penetration.
During the earnings call, Musk announced that the unveiling of Tesla’s robotaxi has been rescheduled to October 10, delayed from the originally planned August 8 date. Musk explained that the postponement would allow Tesla to include additional features in the robotaxi before its official reveal. The robotaxi is expected to showcase Tesla’s “unboxed manufacturing strategy,” a novel approach the company has previously promoted.
This upcoming reveal is particularly critical, as Wedbush analyst Dan Ives noted. In a recent note, Ives emphasized the importance of the AI and Full Self-Driving (FSD) capabilities in Tesla’s future valuation, suggesting that a clear monetization path for these technologies could push Tesla’s market value above $1 trillion in the coming years.
In other updates, Tesla reported significant progress in the production of its Cybertruck, which more than tripled in volume compared to the first quarter. The company aims for the Cybertruck to reach profitability by the end of the year. Additionally, Tesla’s Semi truck factory is on schedule to begin production by the end of 2025.
The second quarter also saw Tesla deliver 443,956 vehicles globally, surpassing the Bloomberg consensus estimate of 439,302. However, this figure represents a nearly 5% decrease from the same period last year, although it is a substantial improvement from the 386,810 vehicles delivered in the first quarter. This improvement has been viewed positively by some analysts, suggesting a potential rebound in demand for Tesla vehicles after a challenging period.
A notable highlight in Tesla’s Q2 report was the deployment of 9.4 GWh (gigawatt hours) of battery energy storage, marking the company’s highest quarterly amount ever and more than double the deployment in the first quarter. This significant deployment has been described as a “show stealer” by Morgan Stanley’s Adam Jonas, who noted that the figure exceeded the firm’s forecast, underscoring Tesla’s expanding capabilities in energy storage solutions.
Overall, while Tesla’s mixed Q2 results indicate some challenges, particularly in earnings and growth projections, the company’s advancements in new vehicle production, energy storage, and its forthcoming robotaxi unveil suggest a dynamic future trajectory. The market’s response and future performance will likely hinge on Tesla’s ability to deliver on these promises and navigate the competitive EV landscape.
