Tesla stock hit 2024 lows Friday after Reuters reported the EV company canceled its long promised next-generation $25,000 vehicle, choosing to focus on developing its self-driving robotaxi platform. Chief Executive Elon Musk claimed the story was untrue.
Reuters, citing three anonymous sources and internal messages, reported Friday that Tesla no longer plans to make its low-cost entry level vehicle. Tesla will reportedly continue developing its robotaxi on the "same small-vehicle platform." A source told Reuters that Musk is going "all in" on robotaxi.
Musk took to X, formerly Twitter, Friday morning, alleging that Reuters "is lying (again)."
Tesla stock dropped 3.6% to 164.90 during market action Friday, hitting its 2024 low of 160.51 intraday. Earlier this week, Cathie Wood purchased a combined 319,000 shares of Tesla in consecutive trading sessions, according to the daily trade disclosures.
Tesla Stock Has Plunged In 2024, But At Least It's Cheaper, Right? Nope
In January, Tesla reported in its fourth-quarter earnings that its teams are working "on the launch of the next-generation vehicle at Gigafactory Texas" in 2024.
Tesla added it is also "currently between two major growth waves," with the "global expansion" of the Model 3 and Model Y vehicle platform "and the next one we believe will be initiated by the global expansion of the next-generation vehicle platform."
"We're very far along on our next generation low-cost vehicle," Musk said on the Q4 earnings call.
Musk added in January that Tesla was looking to start production sometime in the second half of 2025. However, Musk cautioned his words should be "taken with a grain of salt."
Tesla Stock Performance
Last week, Tesla stock advanced 2.9% to 175.79, booking a second consecutive weekly gain as the EV company started rolling out its latest Full Self-Driving (FSD) update to customers. TSLA shares are trading below the 50-day moving average.
Emails sent by Elon Musk leaked on social media platforms show he is making it mandatory in North America to install and activate the latest version of FSD on vehicles and to take customers on a "short test ride before handing over the car."
Tesla is also offering a one-month free trial of FSD in the U.S. for new purchases or existing EVs that are FSD capable.
With Q1 done, analyst consensus now 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 $2.76 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 27% since the end of 2023. With Tesla reporting earnings on April 23, Wall Street is likely just beginning to cut earnings predictions. Some analysts believe earnings could drop even further, potentially around 2021 EPS of $2.26.
Looking further out, Wall Street consensus has Tesla's EPS in 2025 coming in at $3.79, down from $5.29 at the end of 2023, according to FactSet.
TSLA fell around 13% in March and is the biggest loser on the S&P 500 index so far in 2024.
The EV giant ranks eighth in the 35-member IBD Auto Manufacturers industry group. The stock has a 31 Composite Rating out of a best-possible 99. Tesla stock also has a 10 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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