TSLA : Dip Now & Double Dip in October?
It Is Confirmed !
Tesla finally showed its cards on Tue, 23 Jul 2024 after the bell chimed at 4:00pm US time.
As per my post dated 23 Jul 2024, the car maker was a disappointment.
It looks set to tumble “big” on Wed, 24 Jul 2024 as reality of a 2nd consecutive quarter “loss” sets in.
Based on market’s futures - Tesla looks set to open -7.76% lower @ $227.25, -$19.13 lower than tuesday closing.
Q2 Earnings (Actuals)
Very quickly.
- Earnings per share: $0.52 cents (adjusted) vs $0.62 cents expected, per LSEG consensus estimates.
- Revenue: $25.50 billion vs. $24.77 billion expected by LSEG.
Total revenue has increased by a negligible +2% YoY (from Q2 2023’s $24.93 billion).
Its automotive revenue however, dropped -7.0% YoY to $19.9 billion (from Q2 2023’s $21.27 billion), clearly indicating a waning interest in Tesla’s aged models’ EVs.
Earnings Call.
To avoid questions on Tesla’s earnings, Mr CEO fired the first salvo to create a smoke screen.
In his opening remarks, he confirmed (what market already knew!) that Tesla will host a robotaxi unveiling event on 10 Oct 2024; instead of the original 08 Aug 2024.
However, instead of using the opportunity to tease the market with its “only interesting” proposition, Mr CEO decided to play dodgeball when asked about:
- Status of Tesla’s long-promised autonomous vehicle.
- Whether it would have traditional controls like pedals & steering wheels.
These are very pertinent questions when it comes to (a) 100% autonomous driving and (b) driverless robotaxis.
They are “fair” questions left hovering over Tesla’s robotaxi plans, given that the unveiling has already been delayed — to allow more work on the prototype (whatever that means!).
Theoretically, a steering wheel- and pedal-less vehicle could take months, if not years, to be approved for public roads, from the federal government.
While a traditional vehicle (with pedals & steering wheel), could be released much sooner.
Again, when asked specifically about which regulatory approval Tesla would be seeking, Mr CEO (again) declined to answer.
When probed on whether Tesla would seek an exemption from Federal Motor Vehicle Safety Standards to deploy a vehicle without traditional controls.
His response was to compare Tesla’s “generalized solution” with Waymo’s more “localized” one, which he has the cheek to describe as “quite fragile”.
Regulator & Compliance.
The Federal Motor Vehicle Safety Standards (FMVSS) require cars to have basic, human controls, like steering wheels, pedals, sideview mirrors, and so on.
These standards specify how vehicles must be designed before they can be sold in the US.
If a proposed new vehicle does not comply with all existing FMVSS, manufacturers can apply for an exemption.
However, the government only offers 2,500 exemptions per company per year.
The exemption cap would prevent any autonomous vehicle (AV) company, Tesla included, from deploying purpose-built AV en masse.
Although AV supporters have tried to pass legislation to lift the cap to allow for more driverless vehicles on public roads, the bill is stalled in Congress over questions about (1) liability and (2) readiness of the technology.
Exemptions.
So far, only Nuro has been granted an FMVSS exemption.
Nuro — creates autonomous delivery vehicles for local goods transportation in Texas & California.
It aims to transform the last-mile delivery landscape.
Although Cruise, (GM owned) made similar request to FMVSS for its Origin shuttle, the request was not approved; causing the Origin to be on-hold indefinitely.
Alphabet’s Waymo opted to skip it altogether.
Its driverless fleet still have all the traditional trappings of a car, despite operating on public roads without safety drivers.
Waymo clarified it would eventually introduce a steering wheel-free vehicle, but it has yet to say when or whether it would seek an FMVSS exemption.
In Conclusion.
All of which points to the fact that Tesla will face the same regulatory hurdles, if it decides to do away with the traditional car’s controls.
This comes amidst hints being dropped along the way, such as design drawings showing the vehicle as a steering wheel-free zone.
More importantly, critics have dismissed the Tesla robotaxi as vaporware.
They cited facts like Waymo’s close to 50,000 passenger trips weekly, while Mr CEO continues to make vague promises about a vehicle that (1) has not been seen and (2) may never really exist. Ouch !
Musk is betting the company on it, repeatedly hammering the point that Tesla is an AI company, and not a traditional car company.
And yet he is unwilling to be transparent about the very real hurdles Tesla will likely face as it races to make this vision a reality.
We’ll have to wait until October to get a real answer — or maybe even later, pending further delays.
My viewpoints: (mine only)
Mistake #1 - if Mr CEO is truly a visionary, he should not even need to compare Tesla’s Robotaxi to Waymo’s.
With clarity of mind, he should be strutting to his own beat instead of looking to the left and right to see what his bigger competitors are doing for Robotaxis and Autonomous driving.
To comment that Waymo’s robotaxis are “localized”, is a 100% giveaway.
Mistake #2 - Mr CEO (as seen countless of times on his propaganda “X” platform) is a straight-talking person that does not know what is self-restraint, moderation and hold his tongue; regardless whether his opinion has been seek.
To keep mum during earnings call, is very telling, no?
Either Tesla has a fantastic robotaxi’s that will blow everyone’s socks off come October OR it is still a piece of “work-in-progress” (WIP) stalling-for-time, just like its Full Self Driving (Supervised) - still a WIP after 9 years.
Come October if the unveiling gets stalled again or is underwhelming, do not be surprised that Tesla will endure another round of beating.
Based on 23 July’s $246.38 per share:
- Pivot point 1st Resistance level (high) - $252.88.
- Pivot point 2nd Resistance level (high) - $259.39.
- Pivot point 1st Support Point (Low) - $242.75.
- Pivot point 2nd Support Point (Low) - $239.13.
We know that Tesla will start trading at $229.41 on Thursday morning. (see below)
This means it is time to sit back, relax and watch the fall and allow the mathematical formulas to re-calculate the new resistant and support levels.
- Do you think Tesla will give up the gains made since 28 Jun 2024?
- Do you think there is a remote chance that Tesla will be able to unveil its robotaxis and avoid the October Double-Dip?
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It is really sad to see TSLA didn’t break through but dropped… can back to 180 be careful
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