Tesla (Nasdaq: TSLA) Shares Go Boom

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Tesla Shares Are All Over The Place

Tesla (NASDAQ: TSLA) has experienced a volatile 2024, with shares initially down but rebounding slightly after better-than-expected earnings. Despite delivering 443,000 vehicles in Q2, the company's long-term outlook remains uncertain due to increased competition and the need for a more extensive product lineup. Tesla's future success hinges on introducing new models, such as a more affordable Model 2, a better truck, and an improved SUV to maintain growth and market share.

But Other Stocks Are Ripping Higher

Tesla stock is volatile and still well off all time highs. Weakness in the EV space, and concerns about consumer spending have the company on their heels for now.

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Transcript:

Austin, we've talked a lot about EVs in the boom that was 2023 followed by the recent tide going out on consumer interest.

Buyers are preferring hybrids or ICE vehicles.

And some very recent reporting from McKinsey indicates that 46% of EV owners in the US said they were very likely to switch back to owning a gas-powered vehicle in their next purchase.

So this sounds like bad news for Tesla investors.

I want to ask you, what on earth is going on?

Yeah, you know, shares of Tesla have had a, let's call it a volatile 2024.

Originally, they were down about 10% year to date, but after our most recent earnings, they popped a little over 10%.

So now they're down. They're still down year to date, but much more modestly.

Over the last 12 months, their shares have still lost 13% of their value.

But as we just alluded to, shares exploded higher, up over 9% on July 2nd, and that rally continued on July 3rd.

After the EV maker delivered 443,000 vehicles during the second quarter.

And that's compared to analyst consensus of 439,000 deliveries, and this is according to data from Bloomberg.

So this is a case of things being bad, or earnings we're talking about, bad, but less bad than expected.

And of course, markets are all about expectations.

So that second quarter total delivery figure is higher than the 386,000 vehicles globally delivered in the first quarter, but it's lower than the 466,000 vehicles delivered in the quarter a year ago.

So the company is still on the retreat, but maybe it's not as bad as investors were thinking.

Tesla does not break out sales of the Cybertruck, but investors have been able to pick up on hints about those deliveries based on recall figures.

And unfortunately, last month, Tesla announced its fourth Cybertruck recall since the vehicle's release late last year.

And with that recall notice, about 12,000 trucks appear to be affected.

So that's not a huge volume of vehicles.

And at some point, leadership, specifically Musk, said that they expected the Cybertruck to be their best selling vehicle ever.

Early sales figures don't back that up.

It's a very polarizing vehicle.

But if we look forward, the most important question is, what's next?

Markets are forward looking after all.

The company still does make the best EVs today, and it does so at scale with impressive margins.

But renewed competition from Rivian, flush with their investment from Volkswagen, will make things more difficult for Tesla.

So if we're looking at what the company needs next, I think they need a bigger product roadmap.

You know, investors need to give up on hope that robotaxis are full self-driving or right around the corner.

They're not.

Optimus and the autonomous robot that has been making its way around is certainly exciting, but we have no idea what that timeline looks like.

The solar and energy business has never taken off as much as people want or investors had hoped and projected.

So for now, I think what Tesla really needs, they have to get back to the bread and butter of making great EVs and have a bigger product lineup.

So specifically, they need to look at the more affordable Model 2 to keep its units growth going.

And frankly, they need a better truck and an SUV in their lineup.

These are the two most commonly sold vehicle types in the United States.

They're extremely important for automakers, and they generally carry higher profit margins than sedans, wagons, and other vehicles.

But look at the Model X.

It's extremely stale.

Rivian sold 8,500 R1Ss this year, dwarfing Tesla's Model X sales, which they no longer break out individually.

They bundle it with the Model S.

So if I look at Tesla today, they need a revamped truck, like a smaller Cybertruck, a dramatically better SUV, maybe even name something else entirely because the Model X has some baggage with it.

This is a company that they're seeing slower unit sales.

The Cybertruck has not taken off as much as we need.

They need to get back their bread and butter of being an automaker with appealing products.

And to do that, I think they need a bigger product lineup than they currently offer today.

Yeah, and Austin, I completely agree with you on the need for some product refreshes.

The Model X is an outstanding point.

One other date to circle on the calendar.

You know, I know we're talking about the specifics of vehicles, but August 8th next month, the company is doing its robo taxi day.

Elon Musk has really built the narrative of the company around this.

So I think investors have been happy to see some level of treading water, which is, to your point, the outsized reaction to, you know, Better than bad news around vehicle sales because, you know, they're treading water trying to get to this next area where Elon Musk is kind of drawing the next vision for the company.

So, you know, you got past this milestone.

If you're a Tesla investor, you've got gains.

And now a lot of the attention is going to be looking forward to that kind of more speculative date in the future and what they're going to outline about their long term plans.

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