Tesla earnings recap: Elon Musk failed to reassure investors after Robotaxi delay and profit miss

Musk says there will be some impact if the incentives were to end, but it would be more "devastating" for Tesla's competitors.

The Tesla CEO reiterates that the company's value is focused on its efforts toward autonomous cars, and anyone who doesn't think the company will solve self-driving shouldn't own shares.

That was the final question and the call ends. Tesla's stock was down more than 7% in after-hours trading.

"In our experience, once we demonstrate that something is safe enough or significantly safer than human, we find that regulators are supportive of deploying deployment of that capability," Musk says, adding that he thinks regulators will have a moral obligation to approve Tesla's Full Self-Driving software if the data of miles driven show it is safer than human drivers.

Musk says Tesla is likely to receive regulatory approval in Europe and China by end of the year.

Shares of Tesla are down more than 6% in after hours trading. Musk is asked about a report that he diverted a shipment of Nvidia GPUs away from Tesla to one of his other ventures.

Musk says the report is old and he did so because there was nowhere for Tesla to plug them into. Diverting the shipment was actually beneficial to Tesla, he argues.

Musk says the demand for the product is so high its "often difficult to get the GPUs." As a result, Musk says Tesla is putting more effort into its Dojo supercomputer, which he hopes will eventually compete with Nvidia.

Musk posted some photos of Dojo on X

Asked when the first Robotaxi trip is possible, Musk says that's basically asking when unsupervised full-self-driving is possible.

Musk says his predictions have been off in the past, but he'd be "shocked if we cannot do it next year."

He says Tesla has completed most of the engineering, but there are still some upgrades he wants to make to the vehicle.

He doesn't provide any further specifics about what the product will look like.

"We're also going to show off a couple of other things," Musk says.

The Tesla CEO previously said on X that the Robotaxi event had been delayed from August due to some design changes he requested.

Travis Axelrod, Tesla's new head of IR, officially kicks things off before Musk takes over.

Some of the top questions going into Tesla's earnings call revolve around new products, according to Tesla's anonymous Q&A forum. Retail investors can submit questions on the forum and vote on their favorite ones.

According to the platform, shareholders want to know about Tesla's timeline for its updated Roadster, as well as the potential for a Tesla van. Another popular question revolves around Tesla's upcoming Robotaxi event.

Musk acknowledged earlier this month that Tesla had decided to delay its Robotaxi event, which was initially set to take place August 8, so that the company could make a design change he requested.

Tesla has yet to provide a new date for the event.

"While Tesla faces headwinds from slowing EV sales, Musk could offset the challenges if he articulates a credible path to monetizing robotaxis and emphasizes the company's focus on AI initiatives, cheaper EVs, and energy division expansion," EMARKETER analyst Jacob Bourn said in a note.

Tesla said the $622 million also included some other unspecified costs.

In April, Musk announced more Tesla layoffs, telling staff that the company planned to reduce its total workforce by more than 10%. The company instituted a series of layoffs over the course of several weeks.

Tesla has since posted hundreds of job openings on its careers page.

Tesla stock slid as much as 4% as investors digested earnings results that missed expectations.

The stock was trading at $240.25 in aftermarket hours, lower by about 2.5% from its closing price of $251.51.

Investors will now be tuned into the earnings call for updates on hotly anticipated initiatives including the company's Robotaxi and full self-driving tech.

• Adjusted earnings per share: $0.52 vs. estimate of $0.60
• EPS: $0.42 vs. $0.78 year-over-year
• Revenue: $25.50 billion vs. estimate of $24.63 billion
• Gross margin: 18% vs. estimate of 17.4%

• Operating income: $1.61 billion, -33% y/y, vs. estimate of $1.81

  billion

Source of analyst estimates: Bloomberg

Tesla's stock price is likely around 20% above its fair value, Morningstar analysts estimated.

"Accordingly, we recommend investors wait for a larger pullback and for shares to trade below our fair value estimate with a solid margin of safety before we recommend a good entry point into the stock," Seth Goldstein, a stock strategist at Morningstar, said in a recent note.

The firm maintained its three-star rating on Tesla stock and assigned a fair value of $200 per share, implying 20% downside.

Tesla's Robotaxi Day will likely outshine the results of its upcoming earnings report, CFRA senior stock analyst Garrett Nelson said in a recent note.

"Musk successfully shifted investor focus to long-term opportunities in AI, robotics, energy storage, and other business lines, diverting attention away from near-term challenges," Nelson wrote, adding that he foresaw "long-term growth" ahead for the EV maker.

Nelson maintained his "buy" rating on Tesla and raised his price target for the stock to $250 a share, implying 4% upside from current levels.

Artificial intelligence remains central to Tesla's growth story, Oppenheimer analysts said.

Tesla's full-self driving technology could potentially raise earnings per share by $1-$2 a year through the end of the decade, the analysts estimated in a recent note. Meanwhile, the firm could reap as much as $1.7 billion in value from its Robotaxi market, they added.

"While TSLA delayed its AI, driving some modest softness in shares, we believe the value of its AI platform remains at the center of the TSLA valuation debate," analysts said, reiterating their "perform" rating on the stock.

Tesla's "show-stealer" update from its annual shareholder meeting was that its energy business reported record-high energy storage for the second quarter, which could be a major tailwind for the company, Morgan Stanley said.

"As Gen AI acceleration spurs a multigenerational increase in energy demand, electricity generation, and data center investment, we believe investors will begin to pay more attention to Tesla Energy, which we value at $36 per Tesla share ($130bn) as the business uniquely positioned to benefit from investment in the US electric grid accelerated by the AI boom," analysts said in a July note.

The analysts maintained an "overweight" rating on the stock and issued a price target of $310 per share, implying 30% upside from current levels.

Tesla is still poised to reach a $1 trillion valuation, assuming that the carmaker continues to make headway on AI initiatives, Wedbush said.

"The key for Tesla's stock looking ahead is the Street recognizing that Tesla is the most undervalued AI play in the market in our view with a historical Robotaxi Day ahead for Musk and Tesla," the firm added.

Tesla stock skidded lower last week after Musk said the company's highly-anticipated Robotaxi Day would be pushed out to early October. But a delayed Robotaxi unveiling doesn't change Tesla's long-term growth trajectory, analysts said.

The firm maintained its "outperform" rating and $300 price target, implying another 35% upside from the stock's current levels.

Second quarter

• Adjusted EPS estimate: $0.60
• EPS estimate: $0.49
• Automotive gross margin estimate: 17.9%
• Revenue estimate: $24.63 billion
• Free cash flow estimate: $1.92 billion
• Gross margin estimate: 17.4%
• Capital expenditure estimate: $2.54 billion
• Cash and cash equivalents estimate: $20.58 billion
• Operating income estimate: $1.81 billion

Third quarter

• Automotive gross margin estimate: 17.8%

Full-year 2024

• Deliveries estimate: 1.8 million
• Automotive gross margin estimate: 18%
• Capital expenditure estimate: $10.31 billion
• Production estimate: 1.67 million

Source: Bloomberg data