Tesla shares rose about 10% on Wednesday, helping the stock regain ground after a dismal first quarter.
But as Yahoo Finance's Hamza Shaaban reports, investors appear to be more focused on what the electric automaker promises, rather than the current challenging earnings report:
By the numbers, Tesla painted a bleak picture with its latest quarterly results. But the stock told a different story: excitement. Musk said new models are on the way. After that, Tesla will flourish as a leader in self-driving ridesharing.
With Tesla car sales faltering, Musk offered an upbeat pivot: Tesla is not a car company.
Sales fell 9% from a year ago in the latest quarter, the first decline in four years. Operating profits fell by more than 50% compared to the same period last year. Guidance was also a drag, with executives anticipating “significantly lower volume.”
But the market loved Tesla's reassurance to the world that cheaper cars were indeed coming. As Jefferies analysts said in a note after the report, “Our first impression is of CEO Musk pandering to the market by accelerating new product launches.”
On the earnings call, Musk repeatedly stressed that investors should not view Tesla as an automaker, but rather as a digital platform akin to Uber (UBER) and Airbnb (ABNB) for an autonomous fleet.
During the call, when Lars Moravy, vice president of vehicle engineering, dodged a question about the specific mass-market timeline for the $25,000 vehicle, Musk interjected to say that more details would come at the August 8 unveiling of Tesla's robotaxi. But he added, flourishing his patented vision: “Tesla's way of thinking is almost entirely in terms of an autonomy solution, and the ability to operate that autonomy for a giant fleet.”
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