Tesla shares fell for the second day in a row after investors were disappointed by the lack of investor day details.
Investors punished Tesla (TSLA) – Get a free reportfor a second day, as CEO Elon Musk’s vague comments disappointed shareholders who wanted details about the new models and his Cybertruck.
Tesla shares sank 5.85%, closing at $190.90 per share. Tesla shares fell as much as 6.5% on Thursday after falling more than 5.5% in after-hours trading on March 1.
DON’T MISS: Tesla’s master plan draws disappointed reviews on Twitter
Tesla investors and owners appeared disappointed with the company’s “master plan” that discussed the future of electric vehicles and a sustainable energy economy.
The much-anticipated annual Investor Day on March 1 revealed few details about the new models, when the Cybertruck would be produced and whether Tesla is moving forward with a cheaper $25,000 model.
Investor Day Stock Decrease
Tesla shareholders often react to news Musk reveals at their quarterly or annual meetings.
Tesla shares have rallied 76.6% year-to-date after falling to close at $123.18 on December 30.
The day after the electric vehicle company’s Artificial Intelligence Day on September 30, 2022, which included a prototype of its humanoid robot, Optimus, some shareholders fled and shares fell 8.6%. During Wednesday’s presentation, Musk speculated that Optimus will ultimately be more valuable than the company’s auto business.
The technical information provided at AI Day did not reveal any revenue projections or other details investors typically respond to during company meetings. It was an update to their Tesla Bot that was revealed in 2021.
The company’s shares also fell in September 2020 when Tesla hosted a battery tech day. Shares fell 10.3% despite the company discussing making low-cost batteries for electric vehicles. Before the event, the shares had risen nearly 30%.
In November 2019, the company finally revealed a potential new vehicle, its Cybertruck, but investors were wary of its simple design. Some questioned whether the new truck could compete with other electric truck makers like Ford’s F-150 Lightning and win over fans of more trucks with a more traditional look.
There has been one exception: Tesla shares rose after a recent event, even though the increase was only 1%. Investors had a lukewarm response to the inaugural Artificial Intelligence Day on August 19, 2021. Instead of revealing an actual robot, the company had a person in a robot suit dance onstage. (Videos shown during Wednesday’s presentation showed the robots moving independently and performing simple tasks in a Tesla factory. The increased use of AI-powered robots is one way the company plans to reduce production costs in the future.
Some analysts were unimpressed with Tesla’s “master plan” to use its platform to cut costs for the EV maker by 50%, but no details were provided at investor day held at its headquarters in Austin, Texas. .
In response, Musk tweeted: “Tesla will post a detailed whitepaper with calculations and assumptions shortly.”
Bernstein senior analyst Toni Sacconaghi has a price target of $150 a share with an underperform rating, concerned that the EV maker can’t sell enough cars despite its discounts as it isn’t launching any new vehicles. .
“We believe that in the short to medium term, Tesla is unlikely to ramp up new models fast enough to meet volume expectations of 2.4 million by 2024, especially as the next-generation platform appears to still be in the offing.” design phase,” he said. he wrote in the March 2 research note.
Tesla had slashed prices by as much as 20% for some of its models so buyers could qualify for the $7,500 federal tax credit, but the discounts only “underscore the highly competitive nature of the auto market, where sustained high margins and high volume are unprecedented.” , and which we believe is necessary to justify Tesla’s premium valuation.”
The four-hour meeting did not provide details on when its Cybertruck would be delivered and whether Tesla is moving forward with a cheaper $25,000 model.
The meeting was “somewhat disjointed and quite technical” and, despite introductions from numerous executives, was simply “a message of hope for mainstream electrification than a roadmap for Tesla,” Sacconaghi wrote.
Tesla’s meeting with shareholders, car owners, analysts and the media lacked crucial information on pricing and which vehicle models would be produced on the new, lower-cost platform.
“Tesla did not provide incremental information (price, offer and timing) on its next low-cost vehicle/platform,” it said.
The EV maker cannot produce an inferior model by 2025, Sacconaghi added.
“We don’t think Tesla will be able to offer a low-cost offering in volume before 2025, and we think Tesla will need to lower the price in the interim to meet its growth targets over the next two years,” he said.
Tesla Bulls Maintain Price Targets of $220 to $370
Morgan Stanley analyst Adam Jonas, a Tesla bull, believes Tesla’s “bold vertical integration efforts are about to pay off.”
Jonas, who maintains a $220 per share price target, believes that other EV makers will have a hard time competing with Tesla.
“We left investor day at Giga Austin wondering which of Tesla’s competitors can keep up with the planned spending of more than $170 billion to build out its EV manufacturing base and stationary storage,” he wrote.
Investor Day on March 1 should “boost” investor confidence, wrote Mark Delaney, an analyst at Goldman Sachs.
“Tesla provided important insight into how various teams are working to reduce costs, scale, and improve capabilities,” he wrote. “We believe the company was able to show good progress in areas such as foundries, 4680 cells (as with dry coating of electrodes), semiconductors/power electronics, and software.”
But Delaney acknowledged that investors were looking for more substantial news about Tesla’s near-term plans, such as when “a third-generation vehicle might ship, and therefore the lack of clarity beyond the comment that they’re working as fast as they can”. could be in the next two years will probably be seen as a disappointment to some.”
Tesla has hinted that it will make a $25,000 model to entice more drivers to buy an EV, but critics don’t like the idea.
Wedbush analyst Dan Ives reacted positively to Tesla’s investor day, saying the company is outperforming its competitors.
“To investors, it’s crystal clear how far Tesla stands from the rest of the auto industry when it comes to producing/scaling EVs with another showcase of Tesla’s sheer breadth and scale globally,” he tweeted. “This was a showcase event for Musk and the Tesla community.”
Although investors requested more details about future models and sales projections, Ives is confident that Tesla can offer a cheaper electric vehicle.
“The reality is that the Street has always moved away from the days of Tesla investors ‘wanting more,'” he tweeted. “But in my opinion, that’s Tesla/Musk DNA and seeing the forest through the trees yesterday laid out all the ingredients in the recipe for a cheaper vehicle under $30,000 probably for 25.”
Gary Black, a Tesla bull, did not change his price target and stands by his prediction of $370 a share after the presentation.
“$TSLA still our top position,” he tweeted. “I didn’t change my PT of $370. No change in our long-term thinking on the stock.”
