Tesla shares took a sharp turn on Thursday, Oct. 16 after it plunged to over 6%. The changes took place after Elon Musk released the Q3 2023 results during the earnings report. Unfortunately, it did not meet the Wall Street expectations.
With this, the automaker has missed the revenue and earnings estimates for the first time after more than a couple of years.
Tesla Shares Drop
According to a report by CNBC, the analysts' predictions failed to see Tesla achieving its target revenue for the third quarter. It reportedly fell to $23.35 billion which is below the expected results. The adjusted earnings per share only hit 66 cents.
While the American electric car manufacturer is popular for being a profitable firm, the recent results worried some investors.
Elon Musk's Cautious Outlook
Elon Musk, the CEO of Tesla shared some comments about the state of the global economy. With his "gloomy" remark about it, the business tycoon grew concerned about the high-interest rate environment which might pose some difficulties for consumers who want to purchase cars.
Additionally, the tech entrepreneur said that his company will be focused on cutting vehicle costs before opening a new Mexico-based factory.
Read also: Elon Musk: Tesla Full Autonomy Promised for 2023, Again-Is He Referring to Level 4/5 Autonomy?
What the Analysts Say About Musk
Bank of America analysts recapitulated their neutral rating on Tesla's stock while adjusting their estimates for the fourth quarter and future years due to the company's "lower gross margin profile." They noted the unusual amount of time Musk spent discussing the global economic situation during the call.
On the other hand, analysts from Morgan Stanley analysts pointed out that Tesla's disappointing Q3 results were overshadowed by its "cautious commentary" regarding the economy. They considered this investor call one of the most conservative they've heard from Tesla in recent years and questioned whether the concerns were primarily due to high interest rates or competition and slowing demand.
Tesla's Q3 earnings miss and Musk's cautious outlook on various fronts, including the slow ramp-up of the Cybertruck and uncertain timelines for future projects, raised concerns among Deutsche Bank analysts. They emphasized the ongoing challenges facing Tesla and its growth outlook for 2024.
The future path of Tesla remains uncertain, with several challenges to overcome in the coming months. Since uncertainties are still in Tesla's way, it will reportedly slow down EV production in the meantime just like what GM and Ford did.
In other news, Tech Times reported that Honda, Cruise, and GM collaborated to launch the first batch of robotaxis in Japan.
The new vehicles are expected to be available by early 2026. Since Japan could be a potential market for ride-hailing services, the automakers saw this opportunity to boom in the next few years in an urban-focused country.
