Revenue Surpasses Expectations, but EPS Falls Short; New Vehicles on Track for 2025
Tesla (TSLA) reported mixed results for the second quarter of 2024 after the bell on Tuesday. While the electric vehicle (EV) manufacturer managed to exceed revenue expectations, its earnings per share (EPS) fell short of analyst projections. Despite these mixed results, Tesla’s announcement that it remains on track to produce new, likely more affordable, vehicles in the first half of 2025 provided a silver lining.
Revenue and EPS: A Mixed Bag
For the quarter, Tesla reported revenue of $25.05 billion, slightly above the $24.63 billion expected by Bloomberg consensus and marginally higher than the $24.93 billion reported in the same quarter last year. However, the company posted adjusted EPS of $0.52, falling short of the $0.60 expected, with non-GAAP net income reaching $1.8 billion.
The mixed financial results led to a 2% drop in Tesla shares in after-hours trading. Despite the EPS miss, the company’s ability to exceed revenue expectations indicates a resilient demand for its vehicles and energy products.
Production and Delivery Insights
Tesla delivered 443,956 vehicles globally in Q2, surpassing the Bloomberg consensus estimate of 439,302 but representing a nearly 5% decline from the previous year. However, this figure marked a significant improvement from the 386,810 vehicles delivered in Q1, alleviating concerns about a potential demand free fall.
“We believe the Tesla demand story has made a shift for the positive after a rough last 6-9 months,” said Wedbush analyst Dan Ives. “Stronger-than-expected 2Q deliveries earlier this month mark a major turning point in the Tesla bull case story looking ahead into 2H24/2025.”
Energy Storage: A Bright Spot
A notable highlight from Tesla’s Q2 report was the deployment of 9.4 gigawatt-hours (GWh) of battery energy storage, the highest quarterly amount in the company’s history and more than double the 4.7 GWh deployed in Q1. Morgan Stanley’s Adam Jonas described Tesla’s Q2 energy deployment storage figure as a “show stealer,” noting that it was double the firm’s forecast.
Future Prospects: Affordable EVs and Robotaxi Delays
Tesla’s announcement that it remains on track for the production of new, more affordable vehicles in the first half of 2025 has been well-received by analysts and industry watchers. These vehicles will incorporate aspects of Tesla’s next-generation platform while utilizing existing manufacturing lines, potentially driving the next wave of EV sales.
“Plans for new vehicles, including more affordable models, remain on track for start of production in the first half of 2025,” Tesla said in its Q2 earnings report. This aligns with previous statements by CEO Elon Musk, who has emphasized the importance of affordable EVs in expanding Tesla’s market share.
However, Tesla did not provide an update on its highly anticipated robotaxi. The robotaxi was expected to feature an “unboxed manufacturing strategy” and was initially slated for a reveal on August 8. Musk confirmed last week that the reveal would be delayed, citing a significant design change to the front of the vehicle and the need for additional time to showcase other features.
Wedbush analyst Dan Ives emphasized the importance of addressing the delay in the robotaxi’s reveal, noting that it is critical to Tesla’s long-term valuation. “Addressing the delay in Robotaxi Day and the new timing will be important to hear on the conference call as we believe a linchpin to Tesla reaching $1 trillion+ valuation and ultimately higher over the next year is contingent on the AI/FSD story materializing into a monetization path over the coming years,” Ives wrote in a note.
Tesla’s Q2 report presents a mixed yet promising outlook. While the company fell short on EPS expectations, its robust revenue and vehicle delivery figures, coupled with record energy storage deployments, indicate strong operational performance. The anticipation surrounding Tesla’s upcoming affordable EVs and the delayed yet crucial robotaxi reveal will be key factors to watch as the company navigates the second half of 2024 and beyond. Investors and analysts alike remain optimistic about Tesla’s ability to innovate and lead in the rapidly evolving EV market.
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