Tesla Chief Executive Elon Musk took to X, formerly Twitter, late Tuesday to say that while he is not betting the entire EV giant on it, it is a "blindingly obvious" move to focus on autonomy. Meanwhile, Tesla stock broke below 2024 lows Tuesday and Cathie Wood kept with tradition, loading up on TSLA shares.
It has become increasingly evident in recent weeks that Tesla and Musk are shifting toward an increased focus on autonomy, full self-driving (FSD) and its robotaxi program as EV demand has slowed in 2024. Musk recently proclaimed that Tesla will unveil the robotaxi on Aug. 8.
The Tesla chief wrote on X Tuesday he is "not quite betting the company, but going balls to the wall for autonomy is a blindingly obvious move."
"Everything else is like variations on a horse carriage," Musk added.
Musk's comments come as Tesla this week cut its global workforce by more than 10% as part of the next "phase of growth." There is also growing evidence that Tesla has at the very least postponed its $25,000 next-generation vehicle, the so-called Model 2, to focus efforts on autonomy and its robotaxi program. The Model 2 has been an important piece of many analyst's Tesla forecasts.
Meanwhile, Tesla on Wednesday requested that shareholders ratify Musk's $56 billion 2018 compensation plan despite a Delaware court voiding the plan earlier this year. The shareholder meeting is scheduled for June 13.
Tesla stock fell 1% to 155.46% Wednesday during market action. On Tuesday, TSLA dropped 2.7% to 157.11, hitting a 2024 low of 153.75 intraday. The move undercut its March 14 low of 160.51.
Cathie Wood and her Ark Invest funds purchased 20,683 shares of Tesla on Tuesday, according to the daily trade disclosures. Wood has been beefing up Ark's Tesla holdings in 2024.
Wood's Tesla trades were done through the ARK Innovation ETF, ARK Next Generation Internet and ARK Autonomous Tech. As of April 17, TSLA sits first in ARKK and ARKQ with a 9.8% and 10.01% weight, respectively. Meanwhile, Tesla stock is the fifth ranked holding in ARKW, with a 6.92% weight.
Cathie Wood has long been bullish on Tesla's autonomy push and robotaxi.
Bracing For Q1 Earnings
With few details on Musk's strategy on the robotaxi and the next-generation vehicle, investors and analysts seem skittish ahead of the upcoming earning call next Tuesday.
Analysts project Q1 earnings will fall around 40% to 50 cents per share with sales declining around 4% to $22.43 billion. If Tesla Q1 EPS comes in as expected, it would be the lowest quarterly level since the EV giant hit 48 cents per share in Q2 2021.
Tesla reported in early April that global first-quarter deliveries totaled 386,810 while it produced 433,371 vehicles. The deliveries included a combined 369,783 Model 3 and Model Y units along with 17,027 "other" vehicles. Tesla's deliveries of 386,810 in Q1 undercut even the lowest estimates and marks the lowest quarterly deliveries since 344,000 in Q2 2022.
The EV giant blamed the first-quarter performance on issues with the production ramp up of the updated Model 3 along with factory shutdowns.
On Tuesday, Tesla also appeared to get rid of all U.S. discounts on existing inventory models.
Musk wrote on X the EV giant is "simplifying and streamlining the whole Tesla sales and delivery system."
To maintain sales momentum in 2023 and 2024, Tesla has aggressively cut vehicle prices and offered discounts. Auto gross profit margins, excluding regulatory credits, which peaked at 30% in Q4 2021 amid industry chip shortages, have plunged well below 20%.
Tesla has offered large discounts on inventory Model Y vehicles in the U.S. and other markets over the past year.
Eliminating discounts could prop up Tesla's sliding profit margins, but would likely hit demand.
Tesla Stock Performance
TSLA stock gained 3.7% to 171.05 last week, buoyed by Elon Musk's promise of a robotaxi unveiling on Aug. 8. The prior week, Tesla stock sank 6.2% and Cathie Wood purchased nearly 453,000 shares, according to the daily trade disclosures.
TSLA shares are trading below the 50-day moving average after falling around 13% in March.
Tesla Stock Has Plunged In 2024, But At Least It's Cheaper, Right? Nope
Wall Street consensus has 2024 Tesla earnings firmly below 2023's level. That signals another year of earnings declines for this growth stock. Wall Street currently expects Tesla earnings per share of just $2.67 in 2024, according to FactSet. That would be more than a 13% decline vs. last year's $3.12.
Wall Street's 2024 EPS consensus estimates for Tesla have now come down more than 30% since the end of 2023.
Looking further out, Wall Street consensus has Tesla's EPS in 2025 coming in at $3.65, down from the $5.29 projection at the end of 2023, according to FactSet.
The EV giant ranks eighth in the 35-member IBD Auto Manufacturers industry group. The stock has a 34 Composite Rating out of a best-possible 99. Tesla stock also has an 11 Relative Strength Rating and a 67 EPS Rating.
Please follow Kit Norton on X, formerly known as Twitter, @KitNorton for more coverage.
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