Our Industrials analyst Jay Van Sciver is hosting a Flash Call on Tesla and the state of the EV industry this Thursday at 2PM EST. If you'd like to access this call click here.
As we approach the shareholder vote on June 13th, Tesla's market indicators continue to deteriorate. It is odd for a part-time billionaire CEO to campaign so publicly for an outsized payday; we doubt sophisticated shareholders are pleased by the implicit threats and conflicts. Tesla price increases at the start of Q2 have already been reversed; it is evidently struggling with inventory in an oversupplied market. So many new EVs have debuted that Tesla’s aging 3/Y platform, essentially a single product on which revenue overwhelmingly depends, is no longer interesting in the competitive field. Auto gross margins have nearly halved since Q1 2022, putting Tesla in a precarious position as it tries convincing the market it is an AI, robotics, and any other trendy sort of company that isn’t what it is…an automaker.
Despite reduced delivery guidance, plummeting used vehicle values, price cuts, a DOJ investigation, messy layoffs, and a shortage of credible products, consensus still forecasts a 2% growth in deliveries for 2024 with prices strengthening in the latter half of the year. That is doubtful. Our 2024 EPS estimate is still less than half of consensus; our 2025 EPS estimate is an even smaller fraction. Scenarios with reported losses are increasingly likely.
We’ll outline the broader EV adoption trends, changes to subsidy regimes, the impact of the election/tariffs, and more in our TSLA/EV Flash Call this Thursday (5/23) at 2 pm EST.