Tesla Isn’t A Car Company

by | Apr 25, 2024

Last night, Tesla (TSLA) reported subpar first quarter earnings… Which should have sent shares plummeting. But Elon Musk is arguably one of the most skilled individuals at putting a positive spin on a bad headline.

And that’s exactly what he did.

Sales fell 9% from the first quarter of last year, operating profit dropped 50% from Q1 of 2023, and the company fell far short of their delivery expectations this quarter:

We’d think that this would send shares tumbling right? Especially given notable companies have recently posted “beat and raise” earnings only to have investors sell off in droves. 

Elon’s Positive Spin

But Elon prevented just that, and even prompted shares to skyrocket up 14% at their peak.

So, I’m sure you’re wondering, what did Elon do?

The ultimate pivot.

Tesla isn’t a car company. Musk shared, “The way to think of Tesla is almost entirely in terms of solving autonomy and being able to turn on that autonomy for a gigantic fleet.”

This follows Musk taking to X (formerly Twitter) last Friday to discuss his “robotaxi” which will be a driverless vehicle made for public transportation that will be debuted on August 8th.

To put it frankly, Musk is a strategic genius and was able to prep and ward off the negative headwinds from bad earnings far ahead of time. 

Sweetening The Deal

Tesla is also aiming to have the first iterations of its “Model 2” hit the streets by the end of this year or early next.

This will be Tesla’s first “everyman’s vehicle”. Think of it like the Model T of electric vehicles. It’ll have a price point below $30,000 — that’s far below the $47,388 average new car price we are seeing in the US.

Tesla also shared that the new affordable models would use some aspects of the next-gen platform as well as existing vehicle platforms. This will allow them to be built on the same assembly lines as the Model 3 and Model X.

Tesla is one stock we’ll want to keep our eyes on, especially ahead of that August 8th robotaxi release — as well as the Model 2 release. The affordable Model 2 could be an incredible catalyst for the stock with Elon’s mastery of strategy and ability to sway public opinion.

— Nate Tucci

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