Tesla shares drop 10% amid mixed Q2 results; 'affordable' EVs set for 2025

Tesla Q2 Earnings Report: Highlights and Future Plans

Tesla reported its Q2 earnings after the bell on Tuesday, indicating positive steps toward the production of new, likely more affordable, electric vehicles (EVs) scheduled for the first half of 2025. However, the company also projected a slower growth rate for 2024 compared to 2023 levels. The EV giant posted Q2 revenue of $25.05 billion, slightly surpassing the expected $24.63 billion, and registering a modest increase from $24.93 billion in the same period last year. In terms of adjusted earnings per share (EPS), Tesla reported $0.52 against an expected $0.60, featuring a non-GAAP net income of $1.8 billion. Consequently, Tesla shares saw a 10% drop in early Wednesday trading.

Production Milestones and Upcoming Models

In its earnings report, Tesla affirmed that it is on track with plans to debut new, more affordable EV models by early 2025. The new vehicles will integrate both next-generation and current platform features and will be manufactured alongside the existing lineup. Industry experts believe that introducing a cheaper EV model could significantly boost EV sales. CEO Elon Musk revealed on the earnings call that the unveiling of Tesla’s robotaxi, initially set for August 8, has been rescheduled to October 10 to allow for the inclusion of additional features. Analysts view the robotaxi, featuring advanced autonomous driving capabilities, as central to Tesla's long-term valuation exceeding $1 trillion.

Cybertruck and Semi Factory Updates

Tesla highlighted substantial progress in Cybertruck production, which has tripled since Q1, and is projected to achieve profitability by year-end. The company’s Semi truck factory is also on schedule to commence production by late 2025.

Vehicle Deliveries and Market Response

Globally, Tesla delivered 443,956 vehicles in Q2, surpassing the Bloomberg consensus estimate of 439,302, although this figure represents a nearly 5% decrease from the prior year. Nonetheless, the Q2 delivery total marked an improvement from the 386,810 vehicles delivered in Q1, alleviating some analysts' concerns about waning demand for Tesla vehicles. Analysts, such as Dan Ives from Wedbush, see the robust Q2 deliveries as a positive shift in Tesla's demand storyline, potentially marking a turning point for bullish investors looking into the latter half of 2024 and beyond.

Battery Energy Storage Achievements

A standout element in Tesla’s Q2 report was its deployment of 9.4 gigawatt-hours (GWh) of battery energy storage, the highest quarterly figure recorded by the company and over double the amount deployed in Q1. This significant achievement was highlighted by Morgan Stanley’s Adam Jonas, who referred to it as a “show stealer,” noting it exceeded the firm’s forecast by a large margin.

With ambitious plans for new vehicle models and impressive strides in battery storage, Tesla continues to innovate and expand. While the company faces challenges, the recent Q2 performance suggests a potentially promising trajectory as it pivots into new markets and improves existing product lines.