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Tesla’s recent Q1 2024 earnings call paints a picture of a company in flux. Its unwavering belief in EVs remains, but a significant profit drop hints at a strategic shift.
The EV giant reported a 55% drop in profits, with adjusted earnings-per-share (EPS) of $0.45/share, missing analyst estimates of $0.51/share. Revenues also fell short of Wall Street analyst estimates, reaching $21.3 billion.
$TSLA Q1-2024 Earnings Call With Timestamps & Super Edited
Timestamps:
00:00 Elon Musk Opening Remarks of Tesla
5:23 CFO Remarks of Tesla
9:11 Q&A – 4680 Batteries Updates
9:56 Q&A – Optimus Status
11:16 Q&A – What is the current assessment towards regulatory approval for… pic.twitter.com/gGno7YQ2EM— Pejjy (@CuriousPejjy) April 24, 2024
Tesla’s EV Efforts
Despite these financial challenges, the company remains optimistic, highlighting the record profitability of its energy business, fueled by the booming Megapack energy storage system, which ramped up an all-time high gross profit of 140% in Q1.
However, with a drop in EV revenues, a strategic shift seems to be underway. Tesla, previously a vocal proponent of its robotaxi vision, now acknowledges the need for a swifter refresh of its existing EV lineup.
This change in direction is further evidenced by Tesla’s announcement to accelerate the launch of more affordable EV models. The details are still under wraps. However, while speaking on the company’s first-quarter earnings call, Elon Musk noted that more information about the new models would be announced in August.
Tesla and Humanoid Robots
Tesla’s humanoid robot, known as Optimus, might hit the market by the end of next year, according to Musk. During a recent investor conference call, Musk mentioned that Optimus could start performing factory tasks by this year’s end. This development comes as various companies, including major players like Honda and Hyundai’s Boston Dynamics, explore humanoid robots to address labor shortages and handle repetitive or hazardous tasks in logistics and manufacturing.
*ELON MUSK SAYS TESLA MAY BE ABLE TO SELL OPTIMUS BY END OF 2025$TSLA pic.twitter.com/5AzFeU361k
— Investing.com (@Investingcom) April 24, 2024
Tech giants like Microsoft and Nvidia have also entered the space, supporting startups like Figure. It recently partnered with BMW to introduce robots in its U.S. facilities.
Musk has previously suggested that robot sales might eventually surpass Tesla’s car sales in revenue, emphasizing Tesla’s potential to mass-produce these robots efficiently using advanced AI. Despite Musk’s history of ambitious but unmet promises, such as the unrealized robotaxi network, Tesla released a video this year showing the second-generation Optimus robot performing tasks like folding T-shirts, signaling ongoing progress in their robotics program.
Beyond the Financial Headlines
While the financial results are a concern, the earnings call offers glimpses into other facets of Tesla’s operation. The record profitability of the energy business, driven by the Megapack, demonstrates the company’s ability to diversify revenue streams. This diversification could be crucial for mitigating volatility in the electric car market.
The call also illuminates potential production challenges. Missed delivery targets and lower-than-expected revenue hint at underlying issues that Tesla needs to address to maintain its growth trajectory. Whether these challenges stem from supply chain disruptions, production bottlenecks, or other factors remains to be seen.
Notwithstanding this financial standing, Tesla’s stock price has risen by 10% since its Q1 earnings call was released on April 24.
Investor Outlook and the Road Ahead
The future of Tesla’s stock price remains uncertain. While the company’s commitment to EVs is reassuring for long-term investors, short-term financial performance could lead to volatility. The success of Tesla’s new strategy, particularly the accelerated rollout of new models, will be a key determinant of investor sentiment.
The coming quarters will be crucial for Tesla. They must demonstrate their ability to navigate the current economic climate, address production challenges, and deliver on their promises of a revitalized EV lineup. If they manage to do so, Tesla could weather the current storm and emerge even stronger. However, any missteps could erode investor confidence and hinder their future growth.
