Tesla Is Just A Car Company
Elon Musk spent Tesla's earnings call talking about robotaxis, AI, and humanoid robots while glossing over a car business that is losing ground in the world's largest EV market. The gap between Tesla's vision and its reality is growing harder…
Tesla (NASDAQ: TSLA | TSLA Price Prediction) announced earnings, and CEO Elon Musk’s headline announcements were robotaxis, AI, robotics, and robots. What was almost missing was the fact that Tesla is a car company, and one with modest results in the US and EU. In China, the world’s largest EV market, its results lag industry leaders, all of which are local manufacturers. Some of these “locals” are considered ahead of Tesla in self-driving technology, design, and price.
Tesla’s stock tells the story of what investors think about Tesla’s prospects. It is down 14% this year, while the S&P 500 is 13% higher. Over the last five years, Tesla’s shares are up 27%, and the S&P is up 70%.
Tesla’s revenue for the period was $28 billion, basically flat from a year ago. Net income fell from $1.4 billion to $800 million. Seventy-four percent of revenue came from its auto business. Ten percent came from energy generation and storage. Car deliveries were fairly flat at 486,532.
Musk said that the company’s robotaxi business is promising. However, it is not approved for driverless operation anywhere in the world. Regulators in cities and states are fickle, so no one can say when adoption will be widespread.
As for its Optimus robot product, Musk said there is “still quite a lot of work to do with regard to the AI and the robot for it to be truly useful for open-ended tasks.” That is another way of saying it does not work. Part of Tesla’s appeal is that it will eventually sell millions of these.
Tesla’s prospects could be saved by a merger with Musk-controlled SpaceX (NASDAQ: SPCX). If Tesla shareholders get a strong valuation in any merger, they will get a better deal if the companies merge. Musk usually gets what he wants, which means Tesla’s shareholders will be rescued.
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