Tesla Q2 2024 Earnings Hits🎯 and Misses❌: Risk (危) or Opportunity (机)

Tesla posted total revenues of $25.5 billion, with automotive revenues at $19.878 billion. FactSet consensus  pointed to Tesla posting revenue of $24.5 billion in Q2 2024. Overall, Tesla’s total revenue increased 2% YoY, thanks in part to factors such as growth in the company’s energy generation and storage business, Cybertruck deliveries, and higher regulatory credit revenue, among others.

Tesla’s non-GAAP EPS for Q2 2024 was listed at $0.52, while GAAP EPS for Q2 2024 was listed at $0.42. In comparison, FactSet consensus suggested that Tesla would see earnings per share of $0.61 per share.
3) Profitability
Tesla posted $1.6 billion GAAP operating income in Q2 after restructuring and other charges of $600 million. The electric vehicle maker saw $1.5 billion in GAAP net income and $1.8 billion non-GAAP net income in Q2 2024.
Tesla noted that its operating income decreased YoY to $1.6 billion in Q2, resulting in a 6.3% operating margin. This was due in part to reduced S3XY vehicle ASP, restructuring charges, and an increase in operating expenses largely driven by AI projects, to name a few.

4) Cash:
Tesla’s quarter-end cash, cash equivalents, and investments in Q2 2024 was $30.7 billion. The company noted that the sequential increase of $3.9 billion was the result of a positive free cash flow of $1.3 billion, which was, in turn, driven by an inventory decrease of $1.8 billion and partially offset by the AI infrastructure Capex of $600 million.

Moomoo:

AJ's Financial Summary:

The financial summary of Q2 2024 showed improvement across ALL metrics QoQ. Let us look at the 3 keys metrics shown by the bears:

Profit after tax or Net Income: $1.494B -42.8% YoY or +30.6% QoQ

Gross margin: +18% -0.2% YoY or +0.6% QoQ

Free cash flow: $1.342B +34% YoY or +153% QoQ; FCF in Q1 is negative

Tesla's Financial Summary:

• Tesla: Cybertruck is on track to achieve profitability by the end of this year.

• Tesla: Preparation of Semi factory continues and is on track to begin production by end of 2025

• Tesla has crossed 1.6 billion FSD miles.

• Tesla expects their AI training compute capacity to hit nearly 90,000 H100 equivalent GPUs by the end of the year.

• Tesla: "In Q2, we produced over 50% more 4680 cells than in Q1 and continued to see cost improvements."

• Tesla: "Overall, the Energy business achieved record revenues and gross profit in Q2. The Lathrop Megafactory continues to ramp successfully, achieving a production record in Q2, and the Shanghai Megafactory remains on track for start of production in Q1 2025."

• Tesla: In 2024, their vehicle volume growth rate may be notably lower than the growth rate achieved in 2023 "as our teams work on the launch of the next generation vehicle and other products."

• Tesla:  "We plans for new vehicles, including more affordable models, remain on track for start of production in the first half of 2025.

• Tesla provided a new image update on the construction progress of its Lithium refinery in TX. They say start of production in 2025.

• Tesla's Energy gross margin was 24.5% in Q2 compared to 24.6% in Q1, suggesting that Tesla lowered prices with COGS decline. Tesla's non-automotive gross profit hit a record $900 million in Q2.

• Tesla: "We recognized record regulatory credit revenues ($890M) in Q2 as other OEMs are still behind on meeting emissions requirements."

• Elon: Tesla's Robotaxi unveil will now take place on October 10, 2024.

• Elon: "We expect to have Optimus production version 1 in limited production starting early 2025. This will be for Tesla consumption; We expect to have thousands of Optimus robots produced and doing useful things in our factory by the end of next year."

• CFO: Based on Q2,  about 66% of Tesla's sales in the US were to people who had never owned a Tesla before.

• Elon on Giga Mexico: "We are currently paused. We need to see how things stand after the election; We are increasing capacity at our existing factories significantly."

• Elon:Tesla is likely to receive regulatory approval to launch FSD in other markets like Europe and China by the end of the year.

1) The financial summary of Q2 2024 showed improvement across all metrics QoQ including Net income, Gross margin and Free cash flow, the 3 keys metrics used by the bear to criticize Tesla.

2) The share price, which is highlighted by the bear, was down 12% after the intraday market closed but is only -11.3% YTD and +29.4% in 3 months.

3) According to options data, traders in the options market expect Tesla shares to swing by nearly 10 per cent in either direction by Friday. We should see more volatility in the next 2 days.

4) I think the market has overreacted because the financial report is not bad if you compare it to the other EV company. There are many so-called Tesla's rivals who are still struggling with negative net income or making a loss. I'll be reporting their earnings which will be announcing soon.

6) Morgan Stanley and RBC Capital maintained their Buy Rating and target prices at $310 and $227 respectively. The other analysts who have upgraded the stock with an increase in target price after the earnings call include Goldman Sachs, Citi, Pipe Sandler and Barclay.

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