Tesla Faces Investor Concerns as Musk Fails to Reassure During Earnings Call

Tesla fell short of earnings expectations in the second quarter, despite seeing an increase in revenue. Elon Musk's efforts to allay investor worries on the analyst call were unsuccessful, leading to a more than 7% decline in the stock price during after-hours trading.

Tesla's Growing Challenges

During the recent analyst call following the second-quarter earnings report, Elon Musk fielded inquiries about various issues plaguing the electric car company. These included concerns about the aging product lineup, the delayed Robotaxi event, and worries surrounding the supply of Tesla's AI chips.

Earnings and Revenue Performance

Although Tesla reported revenue that surpassed expectations for the quarter, it failed to meet earnings estimates. The company's adjusted earnings margin also experienced a decline from 18.7% to 14.4% year-over-year, as Tesla implemented price reductions to stimulate sales amidst a challenging market environment.

Disappointment Over Lack of Details

Investors hoping for insights into Tesla's delayed Robotaxi and upcoming cost-effective vehicle were left disappointed, as Musk offered minimal information during the call. The expected unveiling of the more affordable electric vehicle is slated for the first half of 2025, with no further specifics provided.

Regulatory Hurdles and Technological Advances

Tesla faces regulatory obstacles for its autonomous driving technology, including the Robotaxi service. Musk expressed confidence in obtaining regulatory approval but was unable to provide a clear timeline. He also mentioned plans to enhance Tesla's AI capabilities through the development of the Dojo supercomputer.

Resource Allocation and Strategic Decisions

Musk addressed queries about his decision-making process regarding resource allocation among his ventures. Concerns were raised about the diversion of Nvidia GPUs intended for Tesla to other projects. Musk defended the move, citing Tesla's lack of infrastructure at the time to utilize the chips effectively.

Financial Highlights and Investor Sentiment

Despite achieving record profits in the energy storage segment and significant revenue from regulatory credit sales, Tesla's stock faced a notable decline following the earnings call. Musk's ambitious projections for autonomy and company valuation did little to assuage investor skepticism.

As Musk concluded the call, Tesla's stock experienced a sharp drop, reflecting ongoing uncertainties and challenges for the electric car manufacturer.

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By: jsor@businessinsider.com (Jennifer Sor,Grace Kay)
Title: Tesla Faces Investor Concerns as Musk Fails to Reassure During Earnings Call
Sourced From: www.businessinsider.com/tesla-stock-tsla-earnings-call-report-live-updates-2024-7
Published Date: Wed, 24 Jul 2024 00:14:52 +0000