Musk makes a big move, Tesla's after-hours financial report surges 13%! How should we view Tesla's i

Tesla (NASDAQ:TSLA) shot up in postmarket trading, despite posting a sharp drop in Q1 revenue, deliveries, margins, and EPS from a year ago. Investors seem to be latching on to the company’s commitment to launch a more affordable model that can be produced on the same manufacturing lines that are currently utilized for the company’s current model lineup.

Tesla’s Attitude

During the earnings conference call, CEO Elon Musk said the EV adoption rate globally is under pressure, but he still thinks EVs will dominate the automobile industry over the long term. He also said that new models will be launched in the early part of 2025 or potentially late in 2024 using aspects of its autonomous technology. The new models will be built on existing production lines. Musk was not willing to say if the new models would be reiterations of existing models.

Musk also talked up the upside of the latest FSD release. He said a neural network with cameras is the right solution for FSD. He also said Tesla’s (TSLA) AI computing power is making rapid progress. Musk said Tesla (TSLA) is in talks with at least one major automaker about licensing FSD.

In regard to a question on Optimus, Musk said he expects the company will be able to begin selling the humanoid robots by the end of next year. He still thinks Optimus could be Tesla’s (TSLA) largest business of all.

Musk said it is helpful that other automakers are forging a way with regulatory approvals on autonomous driving. He also leaned on data showing autonomous driving is safer than human driving. He envisions a robotaxi fleet that is a combination of Uber Technologies (UBER) and Airbnb (ABNB), with customers and the Austin-based company both controlling parts of the fleet. “In the future, gasoline cars that are not autonomous will be like riding a horse and using a flip phone, and that will become very obvious,” stated Musk.

Analyst reactions

On Seeking Alpha, Investing Group Leader Ahan Vashi noted that Tesla (TSLA) swung to negative free cash flow in Q1. “While Tesla has a $26B cash cushion, the situation could get dicey pretty quickly in the event of a hard landing in the economy,” he warned. Vashi observed that Tesla (TSLA) is coming out with a cheaper vehicle in the second half of 2025 to bridge the gap between growth waves, but thinks the “half-house measure” doesn’t alleviate demand worries. He expects the selling pressure on TSLA shares could come back in the next few sessions.

Seeking Alpha analyst Christopher Robb said the Tesla (TSLA) report seems like a “kitchen sink” reaction after brutal price action, and due to the massive restructuring the company is undergoing. “The initial reaction seems to show that relief over the low-cost model trumped concerns about a greater-than-expected drop in revenue and increasing competition,” he added.

CFRA has a more bullish stance on Tesla (TSLA). Following the report, analyst Garrett Nelson said he thinks the release will go a long way toward helping restore investor confidence in the overall story and justify its valuation premium as a cutting-edge tech company, not merely an auto manufacturer.

After Tesla (TSLA) released its Q1 financial report, the company’s stock price soared by 13% after the market closed. How should investors view Tesla’s investment prospects in this rebound after the plunge?

On the one hand, mainly due to the company’s pessimistic production and sales figures disclosed in early April, the negative news was released in advance, and the stock price had already experienced a significant decline at the beginning of the month. In addition, the core reason for the positive reaction of the stock price after the market closed may be the company’s plan to launch cheap car models, which has brought some new hope to investors who have been continuously pessimistic. If investors want to enter the market, they can monitor the stock market trend at any time through the multi-asset trading wallet BiyaPay, and use BiyaPay to directly deposit U into US dollars, without the need for offshore accounts to invest directly on the platform. Of course, they can also bind the offshore account of Jiaxin Wealth Management in BiyaPay, withdraw US dollars to Jiaxin for investment, withdraw on the same day, and receive the funds on the

Summary

The editor believes that the information provided in Tesla’s financial report just meets the expectations of investors. Musk also emphasized that there will be no negative growth this year, easing concerns about future performance. Some speculate that Musk himself may not be able to tolerate the decline in Tesla’s stock price, after all, he pledged a lot of stocks when buying Twitter, and there will be problems if it falls further. But in any case, these news are a boost for the stock price.

I think Musk’s combination of new and old production lines to produce new cars is really impressive. Although it is not yet clear what the new car will look like, it will undoubtedly significantly reduce Tesla’s capital expenditure and improve the return on investment. The description of autonomous driving this time also makes me more confident in autonomous driving. Not only Musk, but also other executives are confident in the progress of autonomous driving. In short, after this financial report, Tesla’s investment logic has not weakened, but has become stronger in my opinion.

Source: Seeking Alpha
Editor: BiyaPay Finance