Tesla Inc. TSLA bull Gary Black highlighted the company’s planned autonomous ride-hailing service in Austin as a significant development while expressing concerns about automotive margins and the forthcoming affordable electric vehicle’s design.
What Happened: Black, managing partner of The Future Fund LLC, called the planned June launch of paid autonomous ride-hailing in Austin “probably the most bullish thing” from Tesla’s fourth-quarter earnings call.
However, he questioned the company’s low automotive gross margins of 13.6% excluding regulatory credits and sought clarity on the upcoming lower-priced vehicle’s design.
The comments came after Tesla reported fourth-quarter revenue of $25.71 billion, missing analyst estimates of $27.26 billion. Automotive revenue declined 8% year-over-year to $19.8 billion, though the company achieved its lowest-ever cost of goods sold per vehicle at under $35,000.
See Also: Microsoft Shares Slide After Q2 Results, Cloud Revenue Misses Expectations: Details
What Happened: On Tuesday, Black said the importance of the new affordable vehicle’s form factor, warning that simply scaling down existing Models 3 or Y could cannibalize current sales. “Much depends on whether the new $30,000-$35,000 Tesla vehicle extends Tesla’s TAM to the compact category, which represents 15% of global volume,” he wrote on X.
The automaker confirmed its plans for new vehicle production starting in the first half of 2025, though it cautioned that manufacturing on existing production lines would limit cost reduction potential. Tesla also announced plans for volume production of its Cybercab robotaxi beginning in 2026.
The earnings report comes as Tesla faces increased scrutiny following its first annual delivery decline in 2024, with 1.79 million vehicles delivered compared to 1.81 million in 2023.
Price Action: Tesla stock is trading 4.15% higher in the after-hours session at $405.25. Its 52-week trading range is $138.80 to $488.54. Shares lost 2.3% to $389.10 in Wednesday's regular session, according to data from Benzinga Pro.
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