Tesla’s Earnings Call Under Scrutiny as Market Uncertainty Swirls
Tesla’s second-quarter earnings report, set to be released after the market closes on Tuesday, has investors on edge as the electric vehicle (EV) giant faces a turbulent landscape. While the company exceeded delivery expectations in the second quarter, concerns linger regarding the delay of the Robotaxi, slowing demand, and rising costs. With analysts divided on Tesla’s future prospects, this earnings call could be a pivotal moment in determining the stock’s trajectory.
Key Takeaways:
- Earnings Expected Below Last Year: Despite slightly higher revenue estimates than the previous quarter, analysts forecast earnings per share to fall 30% from the same period last year.
- Robotaxi Delay Weighs Heavy: The pushback of Tesla’s Robotaxi launch raises questions about its timeline and the long-term viability of this key growth driver.
- Fundamental Challenges Remain: Analysts are divided on Tesla’s future, with some citing weak demand and pressure on margins, while others highlight the company’s potential in AI and energy storage.
- External Headwinds Intensify: New tariffs on EV batteries and the potential impact of the upcoming US presidential election add to the list of uncertainties facing Tesla.
The Robotaxi Dilemma: A Looming Shadow
Tesla’s delayed Robotaxi launch casts a long shadow over the upcoming earnings call. The company’s ambitious plans for fully autonomous vehicles have been a major driver of investor excitement, but the pushback to October from an initial August timeframe has raised eyebrows.
Analyst Ronald Jewsikow from Guggenheim believes the delay highlights a lack of near-term progress, stating, "If the schedule for a physical prototype or securing some form of credible end market testing is slipping, how can investors gain confidence in the promises of a Robotaxi future?" He further maintains that widespread Robotaxi deployment is unlikely before 2030.
A Mixed Outlook: Skeptical Voices and Bullish Bets
Several analysts remain skeptical about Tesla’s fundamental business outlook, citing concerns about slowing demand and margin pressures in a highly competitive EV market.
Barclays analyst Dan Levy observes, "2Q stands to force investors to at least consider still-challenged fundamentals, and we see risk of stock reversion to the extent results disappoint." Levy believes the quarter may indicate continued strain on margins despite potential signs of recovery.
Wells Fargo analyst Colin Langan shares similar concerns, highlighting weak fundamentals and the new tariffs on EV batteries as major headwinds. He forecasts a significant cost increase for Tesla, with tariffs adding $570 million in 2024 and $1.2 billion in 2025.
However, other analysts remain bullish on Tesla’s long-term potential, particularly in the realm of AI and energy storage.
Morgan Stanley’s Adam Jonas, for example, is optimistic about Tesla’s transition beyond a traditional automaker, stating, "Investors are starting to consider the potential for Tesla to be an expression on the AI theme." He further emphasizes Tesla’s dominant position in energy storage, a market that is gaining traction due to increased climate change awareness.
The Big Picture: Navigating Uncertain Waters
Tesla’s second-quarter earnings call arrives at a crucial juncture. The company faces a complex landscape, navigating a competitive EV market, rising costs, and a delayed Robotaxi launch. While some analysts believe Tesla’s long-term potential remains strong, others emphasize the need for concrete evidence of improved fundamentals.
The upcoming earnings report will be closely scrutinized, and its impact on Tesla’s stock price could be significant. Investors will be looking for clarity on the company’s strategy, its ability to navigate challenges, and its commitment to delivering on the promises it has made.
