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Tesla shares plunge 9% as Q3 earnings fall short

Tesla (NASDAQ: TSLA) saw its shares plummet by 9% on Thursday following the release of its third-quarter results. The company reported revenue of $23.35 billion and earnings of 66 cents per share, both of which …

Tesla (NASDAQ: TSLA) saw its shares plummet by 9% on Thursday following the release of its third-quarter results. The company reported revenue of $23.35 billion and earnings of 66 cents per share, both of which fell short of Wall Street estimates. This marked the first time since the second quarter of 2019 that Tesla missed on both earnings and revenue expectations.

Analysts had anticipated a decline in profitability due to a 7 percentage point drop in vehicle deliveries in Q3 compared to Q2. Tesla produced 416,800 Model 3 and Model Y vehicles, its mass-market models, and 13,688 deliveries of its premium Model S and Model X vehicles. The underwhelming quarter raises concerns about weakening consumer demand, leading experts to speculate about potential future price cuts to stimulate sales.

Jesse Cohen, a senior analyst at Investing.com, stated, “The big question is if this is just a blip, or signs of a bigger shift among consumers as rising interest rates and a weaker economic backdrop discourage consumers from making big-ticket purchases.”

Furthermore, investors are eagerly awaiting updates on Tesla’s highly anticipated Cybertruck, first announced by CEO Elon Musk in 2019. While initial deliveries are now scheduled for November 30, the vehicle has faced repeated delays. Musk cautioned investors about the challenges ahead, emphasizing the need for extensive work to achieve profitability.

Additionally, Tesla’s recent controversial changes to its Model 3 Sedan, including eliminating the traditional turn signal and shifter stocks, have raised questions among investors about the company’s design choices. Musk’s ambitious claims about Tesla’s Full Self Driving technology, recently offered at a reduced price, also captured investor attention. Musk touted the system as “basically baby AGI [artificial general intelligence],” emphasizing its ability to understand reality for autonomous driving.

This tumultuous period for Tesla follows a February recall of 362,000 vehicles due to safety concerns. The company currently faces a lawsuit alleging the sale of defective cars that contributed to a fatal accident, with Tesla attributing the incident to “classic human error.”

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