Tesla shares are up about 10% on Wednesday helping the stock regain traction after a dismal first quarter.
But as Yahoo Finance’s Hamza Shaban reports, investors appear more focused on what the electric vehicle maker is promising could come down the line rather than the current bumpy earnings report:
By the numbers, Tesla painted a dismal picture through its latest quarterly results. But the stock told a different story: excitement. New models are on the way, Musk said. And beyond that, Tesla will prosper as a pioneer in autonomous ridesharing.
As Tesla car sales faltered, Musk delivered an optimistic pivot: Tesla isn’t a car company.
Sales fell 9% from a year ago in the most recent quarter, the first drop in four years. Operating profit tumbled more than 50% from the same period last year. Guidance, too, was a drag, as executives foresee “notably lower volume.”
But the market loved Tesla reassuring the world that, actually, cheaper cars are coming. As Jefferies analysts said in a note after the report, “first impression for us is CEO Musk appeasing the market by accelerating new product launches.”
And Musk on the earnings call emphasized over and over again that investors shouldn’t view Tesla as an automaker but rather as a digital platform akin to Uber (UBER) and Airbnb (ABNB) for an autonomous fleet.
During the call, when VP of vehicle engineering Lars Moravy dodged a question about the specific timeline for a mass market $25,000 vehicle, Musk interjected to say that more details will come at Tesla’s August 8 robotaxi unveiling. But he added his patented visionary flourish: “The way to think of Tesla is almost entirely in terms of solving autonomy, and being able to turn on that autonomy for a gigantic fleet.”