‘Musk on mute' as pet project crashes

News.com.au

3 days ago

Tesla has posted one of its weakest quarters in years, as CEO Elon Musk battles to keep the once dominant EV maker's market share.
In its earnings for the second quarter released in the US on Wednesday, the company announced that revenue was down 12 per cent year-on-year with profit falling short of Wall Street expectations.
It was the greatest fall in quarterly revenue for Tesla in more than a decade.
Adjusted earnings for the second quarter came in at USD $0.40 per share, missing analysts' forecasts.
Free cash flow plunged 89 per cent compared to a year earlier.
Company revenue fell to $US$22.5bn ($34.1bn) for the April-June quarter down from $US25.5bn a year before.
Profit fell from $US1.4bn to US$1.2bn.
'AUTONOMY IS THE STORY'
Despite the figures, Tesla remains the largest electric vehicle manufacturer in the United States however Q2 delivers were down 14 per cent, the second straight quarterly fall.
The company is facing growing competition, particularly from Chinese rivals like BYD, XPeng, Zeekr, GWM and Chery.
It has also faced brand damage following CEO Elon Musk's high-profile political activity and brief advisory role to the Trump administration.
In the earnings call with analysts, Musk focused on the future of Tesla, particularly its plans for autonomous driving, calling the push into self-driving taxis critical to the company's future.
'Autonomy is the story,' he said.
Musk said he has plans to expand Tesla's limited robotaxi service in Austin to half of the US population by end of next year.
But he acknowledge that the timeline was heavily dependent on regulatory approval.
BUYING INTO MUSK'S PROMISES
Stake market analyst Samy Sriram said investors were left with more questions than answers.
'There's very little in Tesla's earnings report that will change anybody's mind on the stock,' she said.
'Bears will point to bleaker than predicted numbers, with revenue, EPS and cash flow all down and declining sales in core markets. Bulls will note pre-production of a more affordable model, a refreshed Model Y SUV, an uptick in Asia and the promise of Robotaxis.'
However, when Tesla CFO Vibhav Taneja was asked about the progress of the Robotaxi pilot, he said only a 'handful of vehicles' were active and that the program has logged 7,000 miles of operation since launching on 22 June 2025.
Sriram said the numbers 'don't make for pretty reading,' pointing in particular to a 51 per cent drop in revenue from automotive regulatory credits, what other car makers buy from Tesla when they can't comply with government emissions rules.
'Analysts flagged beforehand this could be a sore spot for Tesla, but it's still a pain point on the balance sheet,' she said.
However, she added there are 'some bright spots'.
'There's an 18 per increase in Supercharging stalls added, and gross profits from energy storage deployments hit a record $846 million this quarter,' she said.
Investors and analysts still remained cautious as Tesla shares fell more than four per cent in after-hours trading and data from Stake showed 56 per cent of trades were weighted towards selling following the earnings call.
'The market seems to be cautious. There's definitely a bit of scepticism from Wall Street - after the earnings call,' she said.
'Ultimately, the results and reaction are probably a reflection that if you buy into Elon Musk's promises, you'll probably still buy into Tesla. If you don't, you won't.'
eToro market analyst Josh Gilbert said the results show a company 'caught in transition'.
'There's a road ahead, but Tesla is stuck in the slow lane, carrying the weight of underwhelming vehicle sales today while pushing the ambitious promises of Robotaxis, AI, and energy dominance tomorrow,' he said.
Tesla's shift towards AI, robotics and energy storage was a point of conversation during the earnings call but Gilbert said there was a lack of detail regarding delivery timelines or commercial impact.
'While Tesla insists its energy and AI businesses are 'more critical than ever', the company is offering little detail on how or when these emerging divisions will meaningfully move the needle for investors,' he said.
CHEAP MODEL ON THE WAY
The company confirmed its lower-cost Tesla model has entered early production, but volume output is not expected to ramp up until late 2025, pushing its commercial impact further out.
Gilbert said Musk's low energy during the earnings call may not help rebuild confidence.
'Musk's low-energy tone on the call will likely disappoint shareholders; it felt like Musk on mute rather than Musk the magician, particularly at a time when a steadier, more confident hand at the wheel was needed,' he said.
While Tesla continues its plans for full autonomy and global energy dominance, with no update on delivery guidance and Tesla's second-quarter drop, the future looks uncertain.
'The bigger picture here is that Tesla is undoubtedly a technology business rather than an automaker,' he said.
'But with its traditional profit engine stalling, Tesla's visionary plans need to start producing rather than just promising.
'Tesla's long-term vision continues to evolve, from the rollout of its Robotaxi platform to leadership in AI and robotics, and the eventual launch of more affordable models. But in the short term, with weakening fundamentals, leadership distractions and continued delivery shortfalls, the pressure on the share price is unlikely to ease anytime soon.'