Tesla shares fell more than 8% in US premarket trading after the electric carmaker reported second-quarter results that fell short of investor expectations.

Tesla's automotive revenue fell 13% year-on-year to $17.4 billion in the first quarter of 2024 after a 9% drop in shipments and a reduction in average selling prices. The automaker said it earned $1.5 billion on revenue of $25.5 billion in the second quarter of the year. In the second quarter of 2023, Tesla earned $2.7 billion and had sales of $24.9 billion.

The company has been forced to cut prices and offer discounts globally due to slowing sales and increasing competition, especially in China - one of its key markets.

Stock performance and market position

Tesla

TSLA

$210.57 -$19.60 -8.52%

Capital Structure

Market Cap

673.2B

Enterpr. Val.

677.3B

Valuation

P/E

59.0

P/S

7.1

Open $232.60

Day range $210.56 - $233.60

52 week range $138.80 - $278.98

Tesla shares are down nearly 11% this year (to date), while the S&P 500 index is up more than 16%. Tesla remains by far the largest seller of electric cars in the US, but is losing market share to a growing number of competitors. Contributing factors include an aging lineup of sedans and SUVs, as well as Elon Musk's controversial and political comments.

Tesla's delivery numbers

Tesla delivered 443,956 EVs in the second quarter, beating the 439,302 predicted by analysts, but down nearly 5% from a year ago when 466,140 vehicles were delivered. The numbers, however, far surpassed the 386,810 in the first quarter.

Tesla's prospects and future

Opinions on Tesla stock are divided. Some investors believe Tesla's core automotive business is under pressure, while others remain optimistic about the future Musk promises in autonomous driving, artificial intelligence and robotaxis.

The market is focused on several other aspects of Tesla, including when the company will unveil a new car that could revitalize its lineup. Musk said on Tuesday's conference call that Tesla is on track to deliver a new "affordable" car in the first half of next year.

Robotaxis and autonomous driving

Robotaxi was a big topic on the conference call. Musk envisions a world where owners can allow their Tesla vehicles to participate in an Uber-like system - and where the cars would drive autonomously.

When asked when he expects the first robotaxi ride, Musk replied: "I'd be shocked if we don't make it next year."

Musk, however, has a history of making promises that he often fails to keep by the deadline. On Tuesday, Musk pushed back the date of the event to unveil the robotaxi to October, after initially announcing that it would take place in August.

Profitability

Savings from a 10% reduction in headcount are expected to be well over $1 billion on an annual basis. This, along with capital expenditure efficiencies, should improve profitability.

Conclusion

Tesla is currently facing a number of challenges, including slowing sales, increasing competition, and the need to innovate its aging vehicle portfolio. Nevertheless, the company and its founder Elon Musk remain optimistic about the future, particularly with regard to autonomous driving and new car models due to be launched in the coming years. Investors will have no choice but to wait and see if these ambitious plans come to fruition.

Source: Yahoo Finance, CNN.

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