Tesla shares rose nearly 10% on Wednesday, helping the stock regain momentum after a disappointing first quarter.
But as Yahoo Finance's Hamza Shaaban reports, investors are more focused on what the electric vehicle maker is promising rather than the current shaky earnings report:
By the numbers, Tesla painted a disappointing picture through its latest quarterly results. But the stock told a different story: euphoria. Musk said, new models are coming. And even beyond that, Tesla will prosper as the leader in autonomous ride sharing.
As Tesla car sales faltered, Musk delivered an optimistic message: Tesla is not a car company.
Sales in the most recent quarter fell 9% from a year earlier, the first decline in four years. Operating profit fell more than 50% from the same period last year. Guidance was also a hurdle, as officials were estimating “significantly lower volumes”.
But the market liked Tesla reassuring the world that, indeed, affordable cars are coming. As Jefferies analysts said in a note after the report, “The first impression we have is that CEO Musk is pleasing the market by accelerating new product launches.”
And Musk repeatedly stressed on the earnings call that investors should not view Tesla as an automaker, but rather as a digital platform for autonomous fleets, similar to Uber (UBER) and Airbnb (ABNB). Should be seen in form.
During the call, when Lars Moravy, vice president of vehicle engineering, dodged a question about specific timelines for a mass-market $25,000 vehicle, Musk interjected, saying more details would be expected at Tesla's Aug. 8 launch of the robotaxi. Will come at the time of unveiling. But he added his patented visionary flourish: “The way to think about Tesla is almost entirely in terms of solving autonomy and being able to turn that autonomy on to a huge fleet.”
