If you don’t like what is being said, change the conversation. This is an advice Mad Men’s Don Draper once gave. And it looks like Tesla (TSLA) CEO Elon Musk is taking it.
In numbers, Tesla painted a gloomy picture through its latest quarterly results. But the title tells another story: enthusiasm. New models are on the way, Musk said. And beyond that, Tesla will thrive as a pioneer in autonomous ridesharing. Stocks surged after the earnings release, and that momentum continued into the morning of Wednesday, as the stock jumped as much as 14%.
As sales of Tesla cars faltered, Musk issued an optimistic twist: Tesla is not a car company.
Sales fell 9% from a year ago in the latest quarter, the first decline in four years. Operating profit fell more than 50% compared to the same period last year. The guidance has also been a drag, as executives anticipate “significantly lower volume.”
But the market loved Tesla reassuring the world that cheaper cars were coming. As Jefferies analysts said in a post-report note, “the first impression for us is that CEO Musk is calming the market by accelerating new product launches.”
And Musk, on the earnings call, repeatedly emphasized that investors shouldn’t think of Tesla as an automaker but rather as a digital platform akin to Uber (UBER) and Airbnb (ABNB) for a fleet autonomous.
During the call, when VP of Automotive Engineering Lars Moravy dodged a question about the precise timeline for a $25,000 mass-market vehicle, Musk interjected to say that more details would be provided during Tesla’s robotaxi unveiling on August 8. But he added his patented visionary talent: “The Tesla way of thinking is almost entirely in terms of solving for autonomy and being able to enable that autonomy for a gigantic fleet. »
But there is a tension in Musk’s setting of auspicious goals. Call it market dissonance. Musk is enthusiastically trying to convince shareholders that Tesla can outpace self-driving car makers like Alphabet’s (GOOG, GOOGL) Waymo and quickly “solve autonomy,” even as the market sends strong signals that investors want that Tesla provides cheaper electric vehicles.
As Citi analysts wrote in a post-earnings note, “We like Tesla’s product pivot that appears to prioritize speed and launch/redesign of existing capacity.”
But in his shift in focus, Musk is downplaying what people are asking for, moving on to Tesla’s next big project, and shifting the company’s valuation targets and ultimate vision.
Musk later expanded on this call: “We should be considered an AI robotics company. If you think of Tesla as just a car company, that’s just not the right framework. If you ask the wrong question, it’s impossible to find the right answer. »
He then encouraged self-reliant non-believers to obtain…
