To The Moon

🌟🌟🌟Tesla $Tesla Motors(TSLA)$  much anticipated "We Robot" event has come and gone.  However it is deserving of the dazzling future in Autonomous Technology that it presents.  Elon Musk certainly knows how to present with lots of showmanship pizzazz, robots  and sleek vehicles.

Tesla introduced the Cybercab, a futuristic 2 seater autonomous vehicle designed to offer convenient eco friendly personal transport.   Costing less than USD 30,000, this electric vehicle aims to make self driving cars more accessible to the every day consumer.  With a minimalist design and Tesla's state of the art technology, the Cybercab is set to reshape the concept of personal urban transport.

Tesla also introduced the Robovan, an electric autonomous vehicle the size of a bus.  This is aimed at revolutionising mass transport.  Robovan underscores Tesla 's ambition to integrate autonomous vehicles into every corner of the transit ecosystem.

One of the most exciting aspects of Robotaxi is its reliance on AI.  There is no steering wheel, no pedals - just the power of Tesla' s Full Self Driving (FSD) technology.  While this bold design marks a significant step towards fully autonomous vehicles,   it also raises questions about its safety, regulations and public readiness to embrace the new technologies.

Elon Musk announced that Fully Autonomous driving will begin with Model 3 and Model Y next year.  However the production of Robotaxi is expected between 2026 and 2027.

Tesla's ambitious announcements have been met with both excitement and also skepticism. 

Cybercab's smooth demonstration impressed many with its technical prowess.  The Robovan was also seen as a promising solution for high density urban transit.

However questions and doubts remained about the delivery time line and actual production schedule.  

Tesla is scheduled to report its Q3 24 Earnings on Thursday October 24.  Consensus revenue forecast is USD 25. 64 billion, up about 8% year over year. The Consensus Earnings Per Share forecast is  0.57 cents per share.

Tesla has posted its Q3 24 vehicle production and deliveries report in early October.  Its share price fell as much as 3.7% after the report.

Total deliveries Q3 24 was 462,890 and Total production for Q3 24 was 469,796.  This was below Analysts expectations.  

Tesla is facing increasing competition especially in China from companies like BYD and Geely as well as from Li Auto and Nio.   However in the US, Tesla still sells more EVs than any other automaker with Hyundai a distant second. 

In the forthcoming Q3 24 Earnings, investors will be particularly focused on Tesla's profit margins.  Tesla has been offering attractive financing options as well as a plethora of incentives to drive sales volume in recent months both in the US and China. This may affect its profit margins. 

Performance wise Tesla is up 0.6% on Tuesday but down 10% for the past 5 days. Tesla has dropped 11% year todate and is also down 13% in 2023.

Is Tesla A Buy Ahead of its Q3 24 Earnings? 

Wall Street consensus has Tesla's 2024 earnings below last year's level.  This signals another year of earnings declines for Tesla.  Analysts currently expect Tesla Earnings Per Share to be just USD 2.22 in 2024 according to FactSet.  This would be a 30% decline versus USD 3.12 in 2023.

The average price target for Tesla is USD 207.83, which is below the last closing price of USD 219.57.  This is based on 35 Wall Street Analysts according to Tipranks. 

While it seems that it is doom and gloom for Tesla currently, I believe that Tesla is a compelling buy if it is held long term.  

Tesla is currently between growth projects as it develops its more affordable EV code named Model 2.  According to Tesla, this EV will be launched by the end of 2025.  When it is ready, this will generate solid deliveries growth in 2026.  

Tesla's energy generation and storage business is Tesla's fastest growing segment.  It posted gross profit of USD 740 million in Q2 24, at almost 25% margin. This will certainly help Tesla to boost its earnings. 

Tesla also has Cybercab, Robovan, Full FSD and Teslabot projects in the pipeline.  When these projects are launched, Tesla would be a company that is firing on all cylinders! 

Patience and time in the markets are key ingredients to ride the volatility ahead for Tesla before investors can hit the jackpot.  

As Warren Buffett likes to say When there is Fear in the markets it is time to be greedy. 

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