Tesla misses expectations again - Analysts concerned
The times when customers stood in lines at Tesla are over. The competition has become stronger, Tesla's electric vehicles no longer sell themselves. This is reflected in the balance sheet.
The price war on the electric vehicle market leaves deep marks in Tesla's US balance sheet. The company reported after the stock market closed the lowest profit margin in more than five years. The net income dropped by nearly half to roughly 1.5 billion Dollars. Elon Musk spoke of a temporary lull in demand for electric vehicles and referred to the growth opportunities that self-driving cars offer. For October 10th, he announced details about the Robotaxi - two months later than originally planned.
However, investor doubts are growing. The stocks lost seven percent in after-hours trading. "Perhaps more than ever before in Tesla's younger history, Tesla investors need results," said Thomas Monteiro, analyst at Investing.com. "These must come quickly - both for the humanoid robots as well as for the Robotaxi." Tesla has missed analysts' expectations for four consecutive quarters, said Dan Coatsworth, analyst at AJ Bell. "Tesla must now find a better way to cope with the challenging environment for electric vehicles."
Musk: "Overly optimistic"
Musk had announced that his company would focus more on Robotaxis and Artificial Intelligence. A significant role is also assigned to the humanoid robot "Optimus," which is initially intended to be used in production. "Elon is good at showing investors a carrot, but new ideas tend to be big on visions but weak on implementation," said David Wagner, portfolio manager at Tesla investor Aptus Capital Advisors.
Tesla has made significant progress in the Robotaxi area recently, said Musk. "In the past, my predictions here were overly optimistic," he admitted. "I would be shocked if Tesla doesn't manage to drive autonomously without a safety driver in the coming year." Unlike Mercedes or BMW, Tesla currently has no driver assistance system in its offering where the driver can take his attention off the road. But that should change. Tesla will apply for the approval of the "Full Self Driving" system in Europe and China, Musk said. It is likely that the approval will come still before the end of the year, he added.
Affordable Teslas starting next year
However, the automotive business should also attract, especially due to new models. For the third quarter, Tesla forecast higher production. The company announced that, starting from the first half of 2025, it plans to offer more affordable cars. However, the cost savings may be smaller than originally expected. Musk recently announced a new entry-level model, but instead, the existing models will be adjusted. He reacted to the lull in demand for electric vehicles in this way. The earnings in the automotive business fell by seven percent to 19.9 billion Dollars in the second quarter, mainly because fewer cars were sold than expected before the end of the year.
A larger loss was prevented by the fact that other car manufacturers bought more emissions certificates from Tesla than in the previous year. These certificates were factored in, the gross profit margin was 14.65 percent and significantly below the analysts' expectations. The earnings in the energy business, which includes home battery storage systems, were slightly higher at 25.5 billion Dollars.
The price drop in the electric vehicle market has taken a toll on Tesla Motors' quarterly numbers, resulting in the company reporting its lowest profit margin in five years. Investor confidence in Tesla is wavering, with analysts like Thomas Monteiro and Dan Coatsworth expressing concerns about the company's ability to meet expectations in the face of a challenging electric vehicle market.
