Tesla Shares Plunge 9% After Dismal Earnings; Musk’s Future Vision Fails to Reassure Investors
Tesla Shares Plunge 9% After Dismal Earnings; Musk’s Future Vision Fails to Reassure Investors
Tesla (TSLA) stock experienced a significant 9% drop on Thursday, following the release of a dismal earnings report after market close on Wednesday. The electric vehicle giant reported double-digit declines in both earnings and revenue, marking the largest sales slump in the company’s history. This financial downturn is compounded by looming challenges, including the expiration of a crucial $7,500 US EV tax credit in October and a shrinking market for regulatory credit sales.
During Wednesday’s earnings call, CEO Elon Musk largely sidestepped discussions on these immediate financial hurdles, acknowledging only “a few rough quarters.” Instead, Musk reiterated his ambitious long-term vision, emphasizing the long-anticipated robotaxi service and the ongoing development of the humanoid robot, Optimus. This strategic pivot, however, did little to appease a growing number of investors and analysts.
Industry experts expressed frustration over the lack of concrete plans to address near-term issues. Garrett Nelson, an analyst at CFRA Research, noted a shift in investor sentiment, stating, “investors are taking a more realistic view.” He added that Musk’s previous ability to keep investors focused on the long term is now waning as “headwinds are difficult to ignore.” Even traditionally bullish analysts, like Wedbush Securities’ Dan Ives, conceded that “the street is losing some patience.”
Despite a limited rollout of Tesla’s robotaxi service in Austin, Texas, this June, Musk made bold claims on the call, asserting the service would be available to half the nation’s population by year-end. Analysts like Morningstar’s Seth Goldstein remain skeptical, projecting a full robotaxi product no earlier than 2028 due to necessary software testing and regulatory hurdles. This latest series of grand promises, set against a backdrop of underperforming vehicle sales—including the Cybertruck—highlights a growing disconnect between Musk’s future-centric narrative and investors’ demand for immediate operational improvements. The continued sluggishness in the auto business is increasingly drawing focus to Tesla’s near-term viability, as shareholders seek tangible solutions over futuristic visions.
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