The shares of electric automaker Tesla experienced a significant drop of nearly 10% on Thursday. This decline came as investors became disenchanted with the imprecise remarks made by CEO Elon Musk and other executives regarding the company’s latest vehicle, the Cybertruck, as well as their plans for a robotaxi-ready car. The performance on this particular day marked the worst for Tesla’s stock in the past three months.
Cautionary Words from Musk
Elon Musk also issued a word of caution, stating that while Tesla would strive to achieve 1.8 million vehicle deliveries this year, they anticipated a slight decrease in production during the third quarter due to scheduled summer shutdowns. Musk further elaborated that these shutdowns were necessary to carry out numerous factory upgrades. However, the lack of specificity in his comments added to the overall confusion surrounding the company’s future plans.
Concerns over Margin “Headwinds”
Industry analysts also expressed concerns regarding Tesla’s margin “headwinds,” which were recorded at 9.6% – the lowest result in at least the past five quarters. Mark Delaney of Goldman Sachs highlighted these concerns, suggesting that Tesla might face additional challenges in the near future if they decide to lower prices to boost sales volume. Such a move could potentially impact the company’s profit margins.
Stocks Show Signs of Recovery
Although Tesla’s stock initially experienced a sharp decline, it has since shown slight signs of recovery from its overnight lows. However, it still remains significantly lower compared to Wednesday’s closing price of $291.26. Tesla did manage to surpass expectations for both revenue and earnings in their latest financial report. The company reported revenue of $24.93 billion and adjusted earnings of 91 cents per share for the quarter ended June 30, 2023.
Tesla reported a total of 466,140 vehicle deliveries for the second quarter, which serves as the closest approximation of sales disclosed by the company. However, Elon Musk did not provide specific delivery volumes for the new Cybertruck. During the earnings call, he merely mentioned that the Cybertruck would be produced in high volume next year, with an unspecified number of deliveries expected in 2023. The company confirmed that the Cybertruck “factory tooling” was on schedule but clarified that they were only producing “release candidate” builds at present.
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