Tesla shares They have sunk this Thursday between 12% and 14%being one of its biggest collapses in recent years. The fall came after the publication of the second quarter results, worsening even more during the conference with investors, in which Elon Musk recognized that manufacturing their humanoid robots Optimus on a large scale it will be much more complicated than he had promised until now. According to data collected by different specialized media, the fall has erased more than $140 billion in market capitalization in a single day.
What Wall Street didn’t like. Tesla has invoiced $28.24 billion this quarter, 26% more than a year before, and delivered a total of 480,126 vehicles, which are also record figures. However, operating profit has plummeted 57% to $398 million, and operating margin has fallen from 4.1% to 1.4%. On the other hand, adjusted earnings per share remained at 33 cents, well below the close to 51-53 cents that Wall Street analysts expected.
Along with this, free cash flow was positioned in negative for the first time in more than two years, with a balance of around -1.1 billion dollars, while investment spending (capex) shot up 142%, to almost 5.8 billion, within an annual spending plan of 25 billion dollars, according to they detailed from The Next Web.
Worry. More than the numbers, what sank the value even further during the call with investors itself was Musk’s tone when talking about Optimus. And the top person in charge of the company admitted openly that it is the most difficult manufacturing challenge the company has faced. “It’s going to be the most difficult product to scale into production that we’ve ever made at Tesla, because everything about the robot is new,” Musk said during the earnings call. The truth is that it was a rather strange conference, since he also stated that he was “sick.”
ANDn problemyes. Musk himself listed several technical obstacles, including the wear and tear of parts, the difficulty of achieving dexterity similar to that of a human hand (which he described as “something incredible” that no robotics company has yet managed to replicate) and the risk of breakdowns. Also stressed that, unlike cars, for which Tesla already has a consolidated supply chain, Optimus has no previous supply chain and is made up of about 10,000 unique parts, many of them manufactured from scratch. In fact, Tesla removed from its second quarter earnings presentation references to Optimus mass production that it had included in its first quarter earnings report, according to they pointed from The Next Web.
script twist. Musk’s tone has changed from previous results. Last year he claimed that he would be “surprised” if Tesla was not producing 100,000 Optimus units per month within five years, and in January 2025 he even projected between 50,000 and 100,000 robots by 2026, according to they remembered from the middle. However, in January of this year he had already recognized that no Optimus was still performing useful tasks in Tesla factories. And the more than a thousand Generation 3 robots deployed in Fremont and the Texas Gigafactory were dedicated solely to collecting training data.
Musk also took advantage of the call to defend Optimus against rivals such as Figure or Boston Dynamics, insisting that demonstrations of other humanoid robots circulating on the Internet are “pre-programmed or teleoperated,” and that Optimus will be the first capable of performing general tasks autonomously.
Robotaxis. Musk also had things to say about the launch of your robotaxis service, pointing that the vehicles have already exceeded 380,000 kilometers without supervision in six cities and “without notable incidents.” But, as they point Since Electrek, it is Tesla itself that decides what counts as “remarkable”, and that same number of kilometers is traveled by Waymo, its main competitor, in just one day.
On the other hand, the company’s internal data shows that the growth of the service is stagnant. And the paid kilometers have remained flat, around 900,000, and the active fleet without supervision has been reduced to only 21 vehicles.
Technological setback. It hasn’t been a good week for big tech this week. On the same Thursday, the Nasdaq fell more than 2% and the S&P 500 and the Dow Jones lost more than 1%, also dragged down by the results of Alphabet, which dropped 6.5% in the stock market after announcing a strong increase in spending and its first “burn” of cash. Together, the “magnificent seven” of the stock market lost $767 billion in value in a single day, according to Bloomberg. The VIX volatility index, Wall Street’s so-called “fear gauge,” rose to its highest level in almost a month.
And now what. During the same call, investors asked Musk about the highly rumored merger between SpaceX and Tesla. The businessman did not rule it out, although he did not give many details either. “We cannot talk about merging companies at an earnings conference,” he said, adding that such a move “has to be done with the appropriate process.”
The future of Optimus is also not a minor matter for Musk himself, as part of his compensation package as CEO is conditioned to the delivery of one million Optimus robots within a period of ten years, and things are not starting at the moment. For the moment, Tesla has converted part of its assembly lines in Fremont to manufacture Optimus and is building a specific plant next to the Texas Gigafactory, but it no longer dares to set a date for the start of volume production.
Cover image | Flickr (Ministry of Communications), Unsplash (Priscilla Du Preez)
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