Well that didn’t last long. Upon yesterday morning's bullish optimism, stocks ended up dipping in the red with only 2 out of the 11 total sectors closing in the green. 

(Source: Giphy) 

If the market feels like a teenage drama queen these days, it’s because it is. The back and forth mood swings after last week's horrific showcase in price action has investors on the edge of their seats as earnings season injects most of the volatility.

Yet, while Google managed to boost some confidence in the market as it beat on top and bottom line estimates yesterday, posting $84.7B last quarter (mainly from peepholing you everywhere on the internet)...  

(Source: Reuters) 

Tesla was the one who crashed the party leaving investors with one big question: Is it even an Automotive company anymore?

You see, while Tesla reported a 2% year over year climb in revenue, hitting $25.5 billion, Elon’s prized EV company still took an -8% nosedive in premarket trading today. “But it beat revenue though?” Exactly, and while that sounds good… the devil is in the details. 

(Source: New York Post)

Even though Tesla saw a slight boost, their automotive revenue - Tesla’s bread and butter - fell by a disheartening 7% to $19.9 billion. So where in the actual heck did all the revenue come from you ask? 

That’s the funny thing - according to Tesla’s earnings, $890 million of that sweet, sweet revenue came from government EV credits. That’s right, nearly $1 billion of Tesla’s recent quarter revenue came from legit regulatory handouts. (If that doesn’t tell you how obsessed the government is with achieving zero-emissions, I don’t know what will). 

(Source: Market Watch) 

So even though this whole scenario is like finding out your favorite impossible burger actually contains real beef… Tesla ain't really making that much money as an automotive company. (As of now).

(Source: Giphy) 

With competition heating up (looking at you, China) and interest in EV’s cooling down, Tesla has been forced to cut prices on most of its inventory. As expected, this has pushed Elon & Co. to sling around discounts and special financing deals faster than Oprah hands out cars. 

However, with second quarter vehicle sales dropping to 443,956, a 4.8% dip from the same period last year… It's clear that the price slashes and the low-interest financing aren’t getting butts into Tesla seats either. The demand just doesn’t appear to be there folks. 

(Source: Reuters) 

But with that said, Elon is Elon. He’s the renaissance man of the century, and while most CEO’s would be wallowing in self-pity, Elon isn’t just sitting around twiddling his thumbs. According to reports, during the earnings call, Elon disclosed more info on his robotaxi and Optimus projects. 

(Source: Giphy) 

Like most suspected, He pushed back the robotaxi event to October, saying, “I wanted to make some important changes that I think would improve the vehicle.” Translation: “We’re not quite there yet, but just you wait”. As far as Optimus, Elon preached that this terminator  humanoid robot will officially be in production by next year and ready for your local factory by 2026. Of course that’s Elon math… so it might be best to push that back a few months. 

(Source: Giphy) 

But alas, even with Elon’s other teaser regarding Tesla’s new affordable cars set to debut the first half of 2025, investors are no doubt jittery to say the least. 

(Source: New York Times) 

Some are hopeful about the future full of self-driving cars and robotic helpers, while others are skeptical, eyeing the current automotive slump and wondering if Tesla’s best days are behind it. Which is understandable. This is the second quarter in a row that Tesla failed to meet Wall Street’s expectations, and with a 7% plunge in automotive sales combined with a depleting EV market worldwide… Tesla has a rough road to climb. 

(Source: Fortunes) 

And with Tesla’s gross profit margin falling to 18%, a far cry from the 29.1% seen in early 2022., investors are left wanting more concrete details on how the company plans to navigate the choppy waters going forward.

So with that said, what’s the takeaway this morning? 

Well Elon is definitely in a pickle. The core automotive business is facing challenges, and while Elon’s dreamscape of a self-driving, robot-assisted future is tantalizing, it’s not exactly paying the bills right now. 

(Source: Giphy) 

Regulatory credits can only prop up the revenue for so long, and If Tesla can't get its motor running on car sales or deliver the goods on Elon’s flashy promises, they might find themselves up a creek without a paddle. 

(Source: Imgflip) 

In the meantime, keep an eye out for the robotaxi even in October. While Elon has failed to deliver on the project before, this might be the spark Tesla needs to reignite investor’s enthusiasm. 

Or….  it could just be another Elon idea that gets pushed under the rug. (See: Hyperloop circa 2013). Regardless, only time will, but in the meantime, I hope everyone has a fantastic Wednesday! And as always, stay safe out there… It's earnings season for God's sake. 

(Source: Giphy) 

Stocks.News holds positions in Tesla and Google as mentioned in the article.