Tesla‘s stock value took a 10% dip on Thursday following the release of the company’s third-quarter financial results, which failed to meet both revenue and earnings predictions. The electric carmaker reported revenues of $23.35 billion with an adjusted 66 cents per share earnings. This disappointing outcome marked the first occasion since Q2 of 2019 that Tesla missed the mark on both counts.
During Q3 22, Tesla generated automotive earnings of $19.63 billion and an additional $1.56 billion from its energy generation and storage segment. The quarter’s net earnings amounted to $1.85 billion. There was a 22% decrease in total gross profit compared to the previous year.
Elon Musk, Tesla‘s CEO, voiced his apprehensions regarding the prevailing global economic conditions during the company’s quarterly investors’ call. He emphasized the challenges posed by the high-interest rate environment, which, according to him, constrains consumer ability to purchase vehicles.
Musk highlighted the company’s commitment to reducing the prices of its cars, a move that Tesla will prioritize ahead of its ambitious plans to establish a new production facility in Mexico. In their post-call analysis, analysts from Bank of America maintained a neutral stance on Tesla‘s stock, adjusting their projections downwards for the final quarter and subsequent years, citing a “reduced gross margin profile.”
These analysts also pointed out their surprise at the amount of time Musk allocated to address broader macroeconomic issues, particularly the high-interest rates. Echoing these sentiments, Morgan Stanley‘s analytical team emphasized the cautious tone set by Musk’s remarks on the state of the economy as the primary driver behind the immediate stock response.
Musk, during the call, advised moderating expectations for the upcoming Cybertruck, stating it could be a year or more until this model begins making a substantial positive impact on cash flows. Deutsche Bank analysts expressed their apprehension following Musk’s comments, noting, “The shortfall in Tesla’s Q3 results, coupled with Musk’s conservative outlook on vehicle demand, the 2024 growth trajectory, the gradual and costly Cybertruck introduction, and the indefinite timeline for the next-gen platform, corroborates our previously expressed reservations regarding the company’s fundamentals as we approach the next fiscal year.“
Their report underlined persistent uncertainties surrounding Tesla’s growth prospects in 2024.
