Tesla second-quarter earnings are expected to fall sharply, but investors are re-energized after better-than-expected Q2 delivery data was released earlier this month. Now it's the waiting game to see what CEO Elon Musk will say on the earnings call Tuesday, as the billionaire Tesla head has stepped up rhetoric supporting former President Donald Trump. TSLA fell Tuesday.
Tesla announces second-quarter earnings and revenue after the market closes on Tuesday. Analyst consensus has Tesla Q2 earnings per share declining 33% to 61 cents with sales sliding more than 2% to $24.05 billion, according to FactSet. However, sharp consensus has revenue increasing slightly to $25.05 billion.
Despite the expected earnings slide for a fourth straight quarter, investor sentiment is upbeat, with Tesla stock surging more than 25% in July after the EV giant announced a surprise vehicle deliveries beat earlier this month.
Analysts and investors are also hungry for information on Tesla's robotaxi reveal, which had been slated for Aug. 8 but has been reportedly pushed to October. Musk confirmed the event postponement with a July 15 post on X, writing that there is an "important design change to the front and extra time allows us to show off a few other things."
On Tuesday evening, the focus, as usual, will be on Musk during the conference call, with investors looking for any insight on the robotaxi event, future cheaper models, the Optimus humanoid robot along with spending on AI and autonomous driving.
Tesla stock dropped 2% to 246.38 during market action on Tuesday, even as vehicle registration data out of China showed a solid start to the third quarter.
TSLA advanced 5.1% on Monday to 251.51. The stock had dropped 4% on Friday to 239.20, their lowest close since July 2, but remained above their 21-day moving average.
Tesla Earnings: Politics And EVs
With President Joe Biden announcing Sunday the he will not seek a second term, Musk, who already endorsed former President Donald Trump, wrote on X that many of his friends living in San Francisco are "excited" about the Republican presidential ticket.
"I believe in an America that maximizes individual freedom and merit," Musk added on Sunday. "That used to be the Democratic Party, but now the pendulum has swung to the Republican Party."
Meanwhile, Trump, in his GOP nomination speech Thursday night, pledged to remove the de facto national EV mandate.
Ending the mandate would likely help Tesla by reducing competition, though California and some other Democrat-led states have their own EV mandates. Also eliminating mandates would reduce Tesla's EV credits revenue.
Trump has previously stated that he favors scrapping EV subsidies, which would likely hurt Tesla.
"Take away the subsidies. It will only help Tesla," Musk said to X on July 16. "Also, remove subsidies from all industries!"
Trump also has said he wants Chinese EV makers to set up plants in the U.S., which would be a big departure from the Biden administration.
On Saturday, Trump also said he had read that Musk is committing around $45 million a month to support his campaign effort.
"We have to make life good for people like him," Trump said.
The Wall Street Journal first reported on Musk's plans to commit around $45 million per month to a pro-Trump political action committee, or PAC, citing people familiar with the matter. In a reply to the story on X, Musk posted a meme with the words "FAKE GNUS."
Q2 Deliveries Bolster Tesla Stock; What About Q3?
Tesla announced in early July that it delivered 443,956 vehicles in Q2 while it produced 410,831 units. The EV giant delivered a combined 422,405 Model 3 and Model Y units along with 21,551 "other" vehicles. The total is down 4% compared with last year's 466,140 deliveries. However, it is a 15% increase compared with Q1.
Tesla hit a record 484,507 deliveries in Q4 2023. The company reported in early April that global first-quarter deliveries totaled 386,810, undercutting even the lowest estimates and marking the lowest quarterly deliveries since 344,000 in Q2 2022.
During the Q1 earnings call, Musk said he expects 2024 vehicle deliveries to grow vs. 2023. The EV giant saw deliveries in 2023 hit a record 1.81 million. However, EV demand appears to be slowing this year.
Along with global delivery numbers, Tesla also reported in early July that it deployed 9.4 gigawatt-hours (GWh) of energy storage products in Q2, the company's highest quarterly deployment to date. In Q1, Tesla deployed 4,053 megawatt-hours (MWh) in Q1, which was an all-time high.
Tesla currently offers solar panels and a solar roof, along with powerwalls for energy storage. On the commercial side, Tesla also offers the "megapack."
Following the Q2 deliveries data, Adam Jonas, Morgan Stanley's high-profile auto analyst, increased his valuation of Tesla Energy to $50 per share, up from his previous $36 view. That comes out to a $183 billion business. Jonas cut his valuation of Tesla's auto segment by $15, bringing it to $56 per share.
Jonas has said that as generative artificial intelligence (Gen AI) increases energy demand, Tesla's energy business could be "uniquely positioned to benefit from investment in the U.S. electrical grid accelerated by the AI boom."
Tesla Stock Performance
Shares have paused for a few weeks after a huge run-up.
Tesla has a 271 handle buy point on a consolidation going back several months to a year, according to MarketSurge chart analysis. After earnings, investors could use a break of the handle's downtrend as an aggressive entry.
In June, shares gained more than 11%. Tesla shareholders recently voted in favor of giving Musk his 2018 $56 billion pay package and reincorporating the EV giant in Texas, moving it from Delaware.
Tesla stock ranks third in the 35-member IBD Auto Manufacturers industry group. The stock has an 87 Composite Rating out of a best-possible 99. Shares have a 91 Relative Strength Rating and a 62 EPS Rating.
Please follow Kit Norton on X @KitNorton for more coverage.
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