Musk's Warning to Gates Backfires: Tesla's Mixed Q2 ResultsApproximately a week ago, Elon Musk cautioned Bill Gates against shorting Tesla stock, suggesting potential negative consequences. However, the situation has shifted, with Tesla's stock price experiencing a significant $20 drop following the release of its earnings report in the aftermarket.
Tesla's Q2 2024 results were a mixed bag, leaving many questions unanswered. While sales increased by 7% compared to the previous year, overall revenue from car sales declined. This news is concerning for investors who primarily view Tesla as a car manufacturer.
Additional points of interest for investors include the timeline for the release of Tesla's new range of affordable vehicles designed to compete with aggressive Chinese manufacturers, which is expected in the first half of 2025. Moreover, the company has postponed plans for increased factory productivity and the unveiling of self-driving vehicles until 2025 and October 2024, respectively.
The lack of clear communication from Elon Musk and his team regarding these developments has contributed to investor uncertainty and subsequently impacted the share price.
Key takeaways from Tesla's Q2 2024 results
Earnings per share (EPS) : $0.61, down from $0.91 in Q2 2023 but up from $0.45 in Q1 2024.
Revenue : $20.16 billion, a 5% decrease compared to the same period last year, but a 16% increase from Q1 2024's $17.38 billion.
Deliveries : 444,000 vehicles, exceeding expectations but still 5% lower than the same period last year.
Several factors have contributed to a decrease in demand for Tesla vehicles, including high-interest rates, which make financing vehicle purchases more expensive for consumers. Additionally, the impact of Tesla's aggressive price cuts from the previous year is diminishing, and competition is intensifying, particularly in the Chinese market. In the domestic market, Tesla is losing ground to competitors like General Motors and Ford.
Despite these challenges, Tesla's share price had experienced a 33% increase in the first eight days of the month, adding $209 billion to the company's valuation.
Looking ahead
The weekly chart indicates that Tesla's share price has rebounded from its April 2024 low of $140, surpassing the 200-day simple moving average (SMA) and the falling trendline from November 2021. Buyers will aim to reclaim the September 2023 high of $278 before targeting the 2023 high of $300. Immediate support levels are at $230 (200 SMA) and $223 (falling trendline). A drop below these levels could lead to the 100 SMA at $210 becoming a potential downside target.
