Tesla Stock Drops Amid Mixed Q2 Results, Promises Affordable EVs by 2025

Tesla's Q2 Performance and Future Plans: A Snapshot

Tesla reported its second-quarter earnings after the bell on Tuesday, highlighting key advancements and future expectations. The electric vehicle (EV) manufacturer confirmed it remains on track to commence the production of new, potentially cheaper EV models in the first half of 2025. However, Tesla noted its growth rate in 2024 would be "notably lower" compared to 2023.

Q2 Earnings Highlights

The company reported Q2 revenue of $25.05 billion, slightly above the Bloomberg consensus estimate of $24.63 billion and marginally higher than the $24.93 billion reported in the same period last year. However, Tesla posted an adjusted EPS of $0.52, falling short of the expected $0.60, resulting in a non-GAAP net income of $1.8 billion. Following the earnings announcement, Tesla shares dipped over 2% in after-hours trading.

New Vehicle Production Plans

Tesla's Q2 report reassured stakeholders about the progress in developing new, more affordable vehicles, set to begin production by 2025. These vehicles will incorporate elements from both current and next-generation platforms and can be manufactured on existing production lines. Industry experts and analysts believe the introduction of a cheaper EV could catalyze a surge in EV sales.

Robotaxi Update

While there was no update on the robotaxi reveal, Tesla reiterated the vehicle would feature the "unboxed manufacturing strategy" previously mentioned. CEO Elon Musk hinted at a delay in the robotaxi's reveal, originally scheduled for August 8, due to significant design changes. Analysts emphasize that clear communication regarding the robotaxi delay and new timelines is crucial, as it plays a pivotal role in Tesla's valuation and its AI/FSD monetization strategy.

Cybertruck and Semi Production

In terms of other vehicles, Cybertruck production more than tripled from Q1, with expectations to achieve profitability by year-end. Additionally, Tesla's Semi factory is projected to begin production by the close of 2025.

Vehicle Deliveries

For Q2, Tesla delivered 443,956 vehicles globally, surpassing the Bloomberg consensus estimate of 439,302 but marking a nearly 5% decline from the previous year. However, this figure represents a significant increase from the 386,810 vehicles delivered in Q1, alleviating concerns about dwindling demand for Tesla vehicles over the past several months.

Battery Energy Storage Achievement

One of the more surprising disclosures from Tesla's Q2 report was the deployment of 9.4 GWh of battery energy storage, the highest quarterly total in the company's history and more than double that of Q1. Morgan Stanley's Adam Jonas called this energy deployment a "show stealer," noting it was twice the firm's forecast.

Conclusion

Tesla's Q2 earnings report presents a mixed bag of results and future aspirations. While the company continues to push boundaries with its innovative new models and impressive improvements in battery energy storage, the delays and lower growth projections signal a cautious road ahead.