Tesla shows EV vulnerability, but it's not the only one
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Tesla's third quarter earnings missed Wall Street expectations, but the company made some product news by announcing that its unusual — and long-delayed — Cybertruck pickup is finally arriving.
Driving the news: Tesla reported $23.35 billion in revenue and $1.85 billion in profits, declines from the prior three months, and the profit figure is also lower than Q3 of 2022.
- Tesla said Cybertruck production and increased artificial intelligence spending hurt the bottom line, Axios' Nathan Bomey reports.
- The company announced the Cybertruck would launch deliveries from its Texas factory on Nov. 30.
Reality check: During Tesla's earnings call Wednesday, CEO Elon Musk warned of "enormous challenges" to scaling Cybertruck production and making it cash-flow positive.
Why it matters: There's a lot of investor and analyst interest in the sustainability of sedan and SUV price cuts that Tesla is using to help sales — but at the expense of margins.
What they're saying: "Investors were left wanting more from Tesla, which is held to a higher standard than every other automaker," Investing.com analyst Jesse Cohen said in a note.
- "Tesla's worrying China sales figures indicate demand for its vehicles is slowing more than expected in the face of rising competition from local EV companies, including BYD, Nio, and XPeng."
The intrigue: Tesla's stock fell in after-hours trading but didn't go off a cliff, falling about 6% in after-hours and pre-market trading.
Yes, but: Tesla has hit a rough patch, though hardly the existential crises of years ago before it became consistently profitable. Big swaths of the wider industry also face challenges.
- The auto workers strike means Detroit's Big Three face lower short-term revenue from the disruption and higher costs from new contracts in the long term.
- Meanwhile, electric vehicle upstarts like Lucid and Rivian have struggled as they try to achieve real commercial scale.
The bottom line: Tesla — which dominates U.S. sales — has huge advantages, and global climate policies should create tailwinds for EVs.
- But chinks in the armor can't be ignored.
