Tesla Retail Investors Willing To Look Past EV Maker’s Shrinking Margins In Q3; Instead, Here’s What They Are Most Focused On
Benzinga – by Shanthi Rexaline, Benzinga Editor.
Tesla, Inc. (NASDAQ:TSLA) is scheduled to release its third-quarter results after the market closes on Wednesday. Even the most bullish on sell-side have expressed concerns over further margin erosion.
But the retail crowd apparently has shrugged off the concern.
What Happened: Margins did not feature in the top shareholder questions compiled by Say, a third-party website that collects shareholder questions on behalf of companies that are meant to be answered on the earnings call. A question posed by an anonymous retail investor regarding the number of Cybertrucks Tesla hopes to deliver in 2024 is the top-voted question, garnering 2,100 votes from shareholders, representing 3.6 million votes.
The second most top-voted question was when the Model 3 refresh, codenamed Highland, will be available in the U.S. This question received 1,200 votes from shareholders representing 2.8 million shares.
The other top questions asked by retail shareholders were on the timeline of Optimus deployment in Gigafactory lines next year, the progress of full-driving software v12 software, the timeline for the full ramp-up of Cybertruck, and the progress update on the 4680 Cell.
Why It’s Important: Tesla continued to adjust prices downward in the third quarter through discounting and price cuts – a trend that it started at the start of the year. Auto gross margin, excluding regulatory credit, a metric analysts focus on, has been declining for the past three quarters, dropping from 24.3% in December 2022 to 18.1% in June 2023.
Deepwater Asset Management’s Gene Munster said he estimates the metric to come in at 17.5%-17.8%. He said the initial market reaction may be negative based on the report but could turn positive during the call, particularly due to commentary on December’s gross margins.
Future Fund’s Gary Black also echoed the sentiment. That said, analysts, including Black, have high hopes for the Cybertruck, which could be commercially available anytime soon. Just as the launch of the Model Y in 2020 gave a big push to Tesla’s volume, the Cybertruck will likely boost the company’s overall volume in 2024, thanks to the “halo effect” it will have on the sales of other Tesla EVs, he said.
In premarket trading, Tesla stock slipped 0.85% to $248.99, according to Benzinga Pro data.
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