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Tesla Shifts Focus to AI and Robotics, Investors Unimpressed
25 Jul
Summary
- Tesla's second-quarter earnings report showed declining sales and profits
- CEO Elon Musk focused on Tesla's AI and robotics plans during the earnings call
- Analysts were disappointed by the lack of discussion on Tesla's core car business
In Tesla's recent second-quarter earnings report, the company revealed that its sales are in freefall, and its profits have been shrinking for three straight quarters. Additionally, the US government is about to cut off a crucial revenue stream for Tesla. However, during the company's earnings call with analysts, CEO Elon Musk barely mentioned these financial challenges.
Instead, Musk focused on Tesla's vision of becoming a robotics and AI company, touting plans for a humanoid robot and other futuristic products. Many bullish analysts, especially those called on during the conference call, seemed to be on board with Musk's vision. But Thursday's stock selloff suggests that Wall Street is having a harder time swallowing Musk's "hey, look over here!" communications strategy.
Musk did acknowledge that Tesla is in a "weird transition period" and could face "a few rough quarters" ahead due to the loss of a $7,500 tax credit for US EV buyers and the vanishing market for regulatory credit sales. However, over the course of the hourlong call, he barely mentioned Tesla's core business of selling cars, which, as one analyst noted, "isn't going great."
