Tesla Q2 results mixed; 'affordable' EVs expected to debut in 2025

Tesla's Q2 Report: Key Insights and Future Outlook

Tesla announced its second-quarter earnings after the market closed on Tuesday. The electric vehicle manufacturer confirmed it is on schedule to commence production of new, likely more affordable, vehicles in the first half of 2025. However, Tesla warned that its growth rate in 2024 would be "notably lower" compared to the levels achieved in 2023.

For the quarter, Tesla reported a revenue of $25.05 billion, slightly surpassing Bloomberg's consensus expectation of $24.63 billion and a modest increase from the $24.93 billion reported a year prior. The company posted adjusted earnings per share (EPS) of $0.52, falling short of the expected $0.60, on $1.8 billion in non-GAAP net income. This news led to a more than 2% drop in Tesla shares during after-hours trading.

New Vehicle Production on Horizon

"Plans for new vehicles, including cheaper models, are on track for production to begin in the first half of 2025," Tesla stated in its Q2 earnings report. These new models will integrate elements from both the next-generation platform and the current platforms and will be producible on the same manufacturing lines as the existing vehicle lineup. Industry analysts anticipate that the introduction of more affordable electric vehicles will drive the next phase of increased EV sales.

Robotaxi Reveal Delayed

Tesla did not provide an update on the timeline for revealing its robotaxi, although it reiterated that the vehicle would feature the "unboxed manufacturing strategy" previously disclosed. CEO Elon Musk had nearly confirmed last week that the robotaxi's unveiling would be delayed from its originally scheduled date of August 8. Musk noted, "Requested what I think is an important design change to the front, and extra time allows us to show off a few other things."

According to Wedbush analyst Dan Ives, addressing the delay in the robotaxi's launch during the conference call will be crucial. Ives wrote that a clear path to monetizing AI and full self-driving (FSD) technologies is essential for Tesla to potentially reach a $1 trillion valuation and higher in the coming years.

Strong Vehicle Deliveries in Q2

Tesla delivered 443,956 vehicles globally in the second quarter, exceeding Bloomberg’s consensus estimate of 439,302 but marking a nearly 5% decline from the previous year. Nevertheless, Q2’s delivery figures represented a substantial improvement from the 386,810 vehicles delivered in Q1, a period that raised significant concerns about a potential drop in demand for Tesla's vehicles.

Wedbush analyst Dan Ives expressed optimism, stating that the better-than-expected Q2 deliveries signal a positive shift in Tesla's demand outlook after a challenging 6-9 months. He described this as a major "turning point" in the Tesla bull case as the market looks ahead to the second half of 2024 and into 2025.

Record Battery Energy Storage Deployment

In a surprising development, Tesla disclosed that it deployed 9.4 gigawatt hours (GWh) of battery energy storage in Q2, its highest quarterly amount ever, and more than double the deployment in the first quarter. Morgan Stanley analyst Adam Jonas highlighted this achievement, calling the 9.4 GWh figure a "show stealer," and noted that it was twice the firm's forecast.

With these significant milestones and challenges, Tesla's Q2 earnings report provides a complex yet optimistic outlook for the future of the company in both the automotive and energy sectors.