Tesla’s Profit Down but Share Price went UP!
This is another interesting story with a 180 degree twist.
$Tesla(TSLA.US$ reported its earnings on Tuesday. Net profit came in at $1.1 billion, down 55% from the same period last year. Revenue was also down by 9%. After enjoying scorching growth for most of 2022 and 2023, Tesla has encountered a tougher market in recent months as more competitors have introduced rival EVs, leading Elon Musk to multiple price cuts over the last year or so. Recently, the company also announced that it plans to lay off more than 10% of its staff as part of its cost cutting initiative.
All this should point to a lower share price. But Tesla gained 12% in Wednesday’s trading. Again, this has got to do with what the top leader of the company has to say during the result briefing.
Elon Musk said new models would likely launch SOONER than late-2025—the date when Tesla previously said a cheaper alternative to its current vehicles would be available. He also said that Tesla plans to unveil its Robotaxi in August, stepping up its efforts to get drivers hooked on its self-driving software. This is the technology that will set Tesla apart from its competitors.
These are music to investors ears because instead of being radical and impressing people with technology, Tesla is finally getting serious about getting the profits in.
That said, I am not sure if Robotaxi is a sustainable product in the long run. I mean, personally Robotaxi is a new reason why I won’t buy a Tesla. Under this Robotaxi plan, Tesla would operate its own fleet of EV taxis (that’s fine), and they also allow customers to deploy their vehicles for the service! That sounds cool, but that also means Tesla can actually control my EV as and when they want to!
$Tesla(TSLA.US$ reported its earnings on Tuesday. Net profit came in at $1.1 billion, down 55% from the same period last year. Revenue was also down by 9%. After enjoying scorching growth for most of 2022 and 2023, Tesla has encountered a tougher market in recent months as more competitors have introduced rival EVs, leading Elon Musk to multiple price cuts over the last year or so. Recently, the company also announced that it plans to lay off more than 10% of its staff as part of its cost cutting initiative.
All this should point to a lower share price. But Tesla gained 12% in Wednesday’s trading. Again, this has got to do with what the top leader of the company has to say during the result briefing.
Elon Musk said new models would likely launch SOONER than late-2025—the date when Tesla previously said a cheaper alternative to its current vehicles would be available. He also said that Tesla plans to unveil its Robotaxi in August, stepping up its efforts to get drivers hooked on its self-driving software. This is the technology that will set Tesla apart from its competitors.
These are music to investors ears because instead of being radical and impressing people with technology, Tesla is finally getting serious about getting the profits in.
That said, I am not sure if Robotaxi is a sustainable product in the long run. I mean, personally Robotaxi is a new reason why I won’t buy a Tesla. Under this Robotaxi plan, Tesla would operate its own fleet of EV taxis (that’s fine), and they also allow customers to deploy their vehicles for the service! That sounds cool, but that also means Tesla can actually control my EV as and when they want to!
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Tonyco : Good point about the remote control security concern. I think it's all too little, too late. People realizing range isn't a big deal. So the battery thing is meh. Cheaper car is all they have. Maybe they can be Honda 2.0 but I doubt it. Cybertruck has all sorts of quality concerns.
And again, they would be able to control it. Or worse, someone else ( already happened search it )
RDK79 : Listen to the entire earnings call, not cnbc’s summary…