Live updates: Tesla profits plunge, but shares rally as company reveals plans for robotaxis and cheaper cars

Individual investors will kick off things like usual, with the company taking questions from an online form where shareholders can upvote questions to the top of the queue.

CFO Vaibhav Taneja says that the company's 10% reduction in overall headcount will save it "in excess of $1 billion on an annual run rate basis."

Musk, CFO Vaibhav Taneja, and Tesla's head of investor relations Martin Viecha are here to discuss the results.

"Global EV sales continue to be under pressure as many carmakers prioritize hybrids over EVs," the company says in its earnings release. "While positive for our regulatory credits business, we prefer the industry to continue pushing EV adoption, which is in-line with our mission."

Musk has dismissed the wildly popular, and often more affordable segment, in the past. In 2022, he called it a "phase," saying on X that it's "Time to move on from hybrid cars."

"We have updated our future vehicle line-up to accelerate the launch of new models ahead of our previously communicated start of production in the second half of 2025," Tesla's earning release says.

Earlier this month, Reuters reported that Tesla had canned plans for its $25,000 electric car. "Reuters is lying (again)," Musk wrote on X in response.

The company is showing off the interface for an eventual ride-hailing service that would be accessible through the Tesla app. The interface shows that customers would be able to summon a car and control the temperature in the vehicle using the app, much like Uber.

Musk said earlier this month that Tesla plans to unveil its new robotaxi in August.

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"We have updated our future vehicle line-up to accelerate the launch of new models ahead of our previously communicated start of production in the second half of 2025. These new vehicles, including more affordable models, will utilize aspects of the next generation platform as well as aspects of our current platforms, and will be able to be produced on the same manufacturing lines as our current vehicle line-up." — Tesla shareholder deck

1st quarter

• Gross margin: 17.4% vs. 19.3% y/y, estimate 16.5%

• Adjusted EPS: $0.45 vs. $0.85 y/y, estimate $0.52

• Revenue: $21.30 billion, -8.7% y/y, estimate $22.3 billion

• Negative free cash flow: $2.53 billion vs. positive $441 million y/y, estimate positive $653.6 million

• Capital expenditure $2.77 billion, +34% y/y, estimate $2.39 billion

• Operating income $1.17 billion, -56% y/y, estimate $1.53 billion

Source: Bloomberg data

Barclays said in a note last week it expected Tesla's earnings call to be a negative catalyst for the stock as investors came to terms with the company's potential strategic redirection away from a low-cost Model 2.

"Facing an investment thesis pivot and a sea of uncertainty, this Tesla call is extra highly anticipated," a Barclays analyst, Dan Levy, said. "Expect negative catalyst."

Levy said he thought Tesla's closely watched first-quarter gross margins would be below consensus estimates on Wall Street.

Barclays rates Tesla at "neutral," with a $180 price target.

Bank of America said Tesla's headwinds are well known and are likely fully reflected in the stock price. That will make the company's commentary around the current state of EV demand and its future growth plans all the more important.

They think that could be setting up the stock for a positive reaction.

"Despite near term pressures, the unveiling of future growth drives has the potential to support the stock," Bank of America said. "Results matter, but growth factors may matter more."

While the bank doesn't expect Tesla to make any big product announcements during its earnings call, it could provide some hints on the highly anticipated Robotaxi event which is scheduled for August 8. Tesla could also reiterate its intention to launch a low-cost Model 2 in 2025 or 2026, which would likely be met with a positive price reaction in the stock.

Bank of America rates Tesla at "Neutral" with a $220 price target.

Analyst Dan Ives said the current environment for Tesla is reminiscent of the challenges and uncertainty the company faced in 2015, 2018, and 2020, but it could result in a loss of long-term shareholders.

"This time is clearly a bit different as for the first time many long time Tesla believers are giving up on the story and throwing in the white towel," Ives said.

Ives said it is crucial that Tesla CEO Elon Musk confirms that a low-cost Model 2 is still on the company's product road map, and said that first-quarter results will likely take a backseat to any updates to the company's long-term vision.

Wedbush rates Tesla at "Outperform" with a $300 price target.

Tesla's recent layoffs suggest the company's long-term growth prospects are dwindling, according to a recent note from JPMorgan.

">10% global layoff undermines hypergrowth narrative and should further dispel notion big 1Q delivery miss was somehow supply-driven," JPMorgan said.

Instead, Tesla's big first-quarter delivery miss was likely driven by a concerning decline in demand for electric vehicles, according to the note.

And the company's premium valuation is at substantial risk if growth is stuttering.

JPMorgan rates Tesla at "Underweight" with a $115 price target.

1st quarter

• Adjusted EPS estimate: $0.52

• EPS estimate: $0.41

• Automotive gross margin estimate: 17.6%

• Revenue estimate: $22.3 billion

• Free cash flow estimate: $651.7 million

• Gross margin estimate: 16.5%

• Capital expenditure estimate: $2.4 billion

• Cash and cash equivalents estimate: $23.24 billion

2nd quarter

• Automotive gross margin estimate: 17.9%

Full-year 2024

• Deliveries estimate: 1.94 million

• Automotive gross margin estimate: 17.9%

• Capital expenditure estimate: $9.91 billion

Source: Bloomberg data