Tesla shares have continued their downward trend, falling more than 8.3% since the company’s “We Robot” event earlier this month in Los Angeles.
The stock has now extended its monthly decline to approximately 13%, as investors await Tesla’s third-quarter earnings report, hoping for positive news to halt the ongoing slide. The drop in share price follows a mixed reaction to Tesla’s highly anticipated robotaxi launch, which left investors wanting more details about the company’s near-term product plans.
Tesla has experienced significant volatility in recent years, losing over $540 billion in market value since its peak in November 2021. The decline was largely fueled by a global electric vehicle (EV) price war, which eroded Tesla’s market share and impacted profit margins. However, the stock had been recovering from its lows earlier this year as CEO Elon Musk signaled a shift toward focusing on artificial intelligence (AI) technologies for self-driving cars, robotics, and energy storage.
That momentum stalled after the robotaxi event, where investors were disappointed by the lack of clarity regarding upcoming products like the more affordable model and the Roadster, both of which are now expected to launch in 2025. CFRA analyst Angelo Zino noted the event did little to address the uncertainty surrounding Tesla’s short-term earnings outlook.
With Tesla’s Q3 earnings scheduled to be announced on Wednesday, investor attention is now focused on whether the company’s core carmaking business can stabilize its stock performance. Analysts expect Tesla to report earnings of 58 cents per share, a 12.1% decline from last year, with revenue projected to rise 8.65% to $25.37 billion. Vehicle deliveries in Q3 increased 6.4% year-over-year, reaching 463,000 units, but Tesla faces the challenge of meeting its 2024 delivery target of 1.8 million vehicles, which will likely require a strong fourth-quarter performance.
Profit margins will also be a key focus, as Tesla has seen margin compression due to price cuts aimed at boosting demand. Analysts expect gross margins to fall to 17.3% in Q3, down 600 basis points from the previous year. Tesla’s ability to improve margins while meeting delivery targets will be crucial in determining its financial health heading into 2025.
Despite ongoing optimism around Tesla’s long-term AI-powered vision, analysts have noted the company’s tendency to miss its ambitious targets. Tesla’s stock is currently trading around $217 per share, down 16% for the month, as investors remain cautious about the near-term outlook.
The Street, Investor’s Business Daily, and Benzinga contributed to this report.
