Tesla Stock: Tesla’s Poor Results PROOF Investors Have Lost Their Minds
Tesla Stock Needs a Correction
What else is new? Tesla Motors Inc (NASDAQ:TSLA) was trading only 0.5% lower yesterday morning, but it definitely could’ve been worse. After all, the American manufacturer of luxury electric cars continued to show losses in its second-quarter results. It also produced fewer vehicles than expected.
Tesla’s CEO, Elon Musk—who runs the car company, a solar panel company, and a space exploration company planning a mission to Mars by 2025—must be running on Tesla stock’s famous “Autopilot.” You would think that the chronic.
To the credit of TSLA stock, revenue of $1.27 billion marked a 33% increase. However, adjusted revenue of $1.56 billion was below market expectations of $1.62 billion. Here’s the truly mindboggling number, though: Tesla reported an adjusted loss per share of $1.06. This was more than double what analysts expected (a $0.52 loss). This was also the 13th straight quarterly loss for Tesla, for those who keep track of such things. (Source: “Tesla posts another loss, but says on track for future deliveries,” Reuters, August 3, 2016.)
Battery technology is advancing rapidly and there’s no guarantee that lithium-ion (Li-ion) batteries will endure the test of time. There’s a good chance that, as many manufacturers start introducing electric cars, battery technology will evolve. For the record, Tesla didn’t invent electric cars. They’ve been around longer than internal combustion cars. Breakthroughs with aluminum-air (Al-air) batteries could blow Li-ion batteries out of the Nevada desert. (Source: “New aluminum air battery could blow past lithium-ion, runs on water,” Extremetech, January 28, 2015.)
Ultimately, though, the problem is not with electric cars at all. There’s nothing wrong with electric cars. Many car companies are introducing them and that’s actually the problem for Tesla. The established manufacturers, those that have confronted production issues when Elon Musk was in diapers, will make them more efficiently. They’re just not getting the cult-like shareholders that are flocking to Elon Musk’s company. Tesla has constantly failed to ramp up production, while it still enjoys a relative monopoly in the luxury electric car market, all because of Musk’s fan boys.
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Copyright 2016 Investors Buz