Tesla shares rise ahead of quarterly results – 04/23/2024 at 10:53

(Automatic translation by Reuters, please see disclaimer

Shares of Tesla TSLA.O rose slightly on Tuesday ahead of the electric car maker’s first-quarter results, with analysts expecting its weakest overall earnings in more than six years.

The stock was up 0.7% at $143 in premarket trading ahead of the report, which is expected to be released after the market closes.

In a conference call following the release of earnings, Chief Executive Elon Musk will face open questions from investors about the fate of the “Model 2,” the low-cost car that he promised in January that would be available in 2025.

Reuters exclusively reported earlier this month that Tesla had scrapped plans for the model and focused on building a self-driving robo-axle on a small car platform.

Mr Musk first posted on social media that “Reuters is lying”, but has yet to point out any flaws or clarify the fate of the model. Investors had pinned their hopes for sales growth on the Model 2.

The billionaire was also due to meet Indian Prime Minister Narendra Modi on Monday and announce a major investment in a car factory that is expected to produce a small, affordable model. Mr. Musk postponed at the last minute, citing Tesla’s “very difficult responsibilities.”

Tesla’s sales growth is slowing, which should weigh heavily on Tuesday’s results.

Earlier this month, the automaker reported an 8.5% drop in shipments and an increase in inventory. Over the weekend, it announced the latest in a series of worldwide price cuts for the Model 3, Model Y and other models, which further cut its margins.

Several analysts expect Tesla’s annual emissions to decline for the first time in 2024, after years of double-digit growth. The company warned in January that shipment growth would be “particularly weak” this year, indicating that price cuts would not be enough to stimulate demand.

Tesla stock has lost nearly 43% since the start of the year and is among the worst performers on the S&P 500 index .SPX.

Wall Street expects Tesla’s gross margin excluding regulatory credits to be 15.2%, according to 20 analysts polled by Visible Alpha, down from 19% a year earlier and the lowest since the fourth quarter of 2017.

Analysts on average see March quarter revenue falling 5.05% to $22.15 billion, according to LSEG data.

Musk has predicted the imminent arrival of fully self-driving cars for years, but delivery could still be years away, due to rigorous engineering and regulatory challenges.

He also raised other questions in his recent social media posts about Tesla’s car strategy. Musk recently announced the “unveiling of Robotaxi” on “8/8,” which means that August 2024, and later indicated that “indulging” in autonomy was a “life-proof” decision.