Tesla (TSLA) reports third quarter results after the bell on Wednesday, with investors searching for clarity on the EV maker’s long-awaited cheaper EV, robotaxi rollout details, and other initiatives like AI and robotics.
Tesla shares are down approximately 9% since Tesla revealed its robotaxi, dubbed the Cybercab, at its showy “We, Robot” event from the Warner Bros. studio lot in Burbank, Calif., on Oct. 10.
For the third quarter, Tesla is expected to report revenue of $25.42 billion, per Bloomberg consensus, higher than the $25.05 billion it reported in Q2 and also topping the $23.40 billion Tesla reported a year ago. The Street expects Tesla to post adjusted EPS of $0.51, on adjusted net income of $2.06 billion, and operating profit of $1.96 billion, per Bloomberg.
Earlier this month, Tesla (TSLA) announced third quarter deliveries that slightly missed expectations, sending the stock lower.
Tesla said it delivered 462,890 vehicles in Q3, up 6.4% quarter over quarter, to mark the first quarter of delivery growth this year. The numbers also came in ahead of the 435,059 EVs the company delivered in the year-ago period. But Wall Street had expected Tesla to deliver closer to 463,897, according to Bloomberg.
The debut and release of a cheaper EV is what many analysts and industry watchers believe will spur the next leg higher of EV sales, as even CEO Elon Musk has said before. During its Q2 report, Tesla and Musk said the company remains on track for the production of new vehicles, likely including a cheaper EV, in the first half of next year.
Investors and analysts were left wanting more details from Tesla’s “We, Robot” event on the Cybercab itself and detailed testing plans, along with questions about the development of Tesla’s sub-$30,000 EV, dubbed the Model 2.
“Overall, we found Tesla’s Robotaxi event to be underwhelming and stunningly absent on detail,” wrote Bernstein analyst Toni Sacconaghi the day after the event. “While Musk articulated his vision for an autonomous world, it offered little beyond what he has articulated repeatedly over the last few years.“
Sacconaghi complained that details on new product offerings like the Cybercab and Robovan autonomous van and timeframes were missing. The analyst also felt Tesla would have a hard time leapfrogging other robotaxi competitors — such as Waymo and Cruise — for regulatory and technical reasons. In addition, the lack of any details or even a rendering of the Model 2 was also a disappointment.
Tesla may show a rendering of that cheaper EV in its third quarter shareholder deck in lieu of actually demonstrating it to investors and the public at an event (or tease another launch event in the near future).
Expect Musk and Tesla executives to be quizzed extensively on the Cybercab for new details and updates on the Model 2.
“While many investors left the Robotaxi Day clearly wanting more details on the broader autonomous and AI strategy at Tesla, we would expect Musk to address some of the timing/specifics around its FSD and Cybercab strategy on the conference call this week along with a possible update on timing for a sub $30k vehicle which we expect in mid 2025,” Wedbush analyst Dan Ives wrote in a note to investors on Monday.
Turning to Tesla’s other activities, more details on full self-driving (FSD) software and enhancements will be in focus; Tesla is facing an NHTSA probe into its self-driving software due to accidents occurring in low-visibility conditions. For a camera-only system like FSD, issues with cameras seeing the terrain and other road objects are concerning.
And while Tesla’s Optimus robot was on full display at the robotaxi event, its feature set was limited, and the robots were later determined to be controlled by human operators. Musk said at the event that Optimus could be Tesla’s bestselling product ever.
Robots aside, the real mover for Tesla stock is auto sales in current quarters and whether Tesla sees deliveries growing into next year.
“While autonomous, FSD, and robotics is the future for Tesla, deliveries in the near-term will drive the stock and the Street will be laser focused on 3Q showing a margin/demand inflection point in the Tesla story heading into 2025,” Ives said.
Pras Subramanian is a reporter for Yahoo Finance. You can follow him on X and on Instagram.
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