Tesla stock plummeted as its earnings missed expectation. What happened?

Tesla’s $Tesla (TSLA.US)$ Q4 earnings report released yesterday, which poured cold water on the heating electric vehicle market. However, this is the sixth consecutive quarter that Tesla has achieved profitability, which means that the company has stepped out of the quagmire of losses and has begun to develop towards stable profitability. Let’s take a look at what investors are concerned about！

This article is a script from the Q&A session of Tesla's earnings call on January 27. In order to facilitate reading, we have made appropriate cuts. If you want to know more details, you can click the link provided by @moo_Live below to re-watch the earnings call.

Tesla stock plummeted as its earnings missed expectation. What happened?

Q: What is currently holding Tesla back from being the market share leader in solar?

A: We're actually seeing tremendous growth in solar quarter over quarter last year. And we had our best quarter since, I think, 2018 in Q4. So we do actually expect to become the market leader in solar and then go far beyond it. Now we got a little more bandwidth, we're putting a lot of attention on solar, and it is growing rapidly. So I think it will not be long before Tesla is, by far, the market leader in solar. Another really important part of the solar strategy is achieving an industry-leading cost structure, which then allows us to have industry-leading pricing. And so that's something that we've accomplished over the last year in terms of getting the cost structure in the place that it needs to be and I think I've mentioned this is a really important part industry-leading pricing to become the leader in the space.

Q：Do we need to do things differently to win the Chinese EV market?

A：We are currently the leader in the Chinese EV market. So I think we're mostly doing something right if we're the best-selling electric car in China. That said, very few of our customers in China, I think maybe as low as 1% or 2%, actually have selected the FSD option. This is much lower than rest of world. So we definitely need to make it work well in China. I think some of it works well in China, then we will have a Grade 4 FSD. I find that the customers in China, Tesla owners in China are among the most discerning in the world. Their attention to detail is incredible. So they -- I'm confident that they will buy FSD as soon as it's working on time. And we hopefully that is later this year.

Q: Can you provide us an update of your thoughts on this market?

A: I think Tesla is definitely going to make an electric van at some point. The thing to bear in mind is that there is fundamentally a constraint on battery cell output. Scaling production is very hard. The main reason we have not accelerated new products is -- like, for example, Tesla Semi is that we simply don't happen our cells group. If we were to make the Semi like right now, which we could easily go into production with the Semi, but we would not have enough to cells built for it right now. We will have cells group in ourselves for Semi when we were producing the 4680 volume. But for example, Semi would use typically five times the number of cells that car would use, but it would not sell for five times what a car would sell for. It would not make sense for us to do the Semi right now, but it will absolutely make sense for us to do it as soon as we can address the cell production constraint.