Tesla’s Q3 2023 Earnings Call was one of the most cautious and perhaps worrisome in years as the automaker admitted high-interest rates and future projects could yield what would be looked at as less-than-favorable for short-term investors.

Long-term Tesla permabulls could not be shaken from their firm stance that the company is set for monumental growth moving forward, and how could they? Musk continued to speak positively about overall growth for Tesla in terms of autonomy, AI, and cell production.

However, analysts are adjusting their 12-month price targets on the stock as Musk’s tone during the call was cautious and aware of the rough waters that lie ahead.

“I’m not saying things will be bad. I’m just saying they might be,” Musk said during the Call. “And I think like Tesla is an incredibly capable ship, but we need to make sure like as…if the macroeconomic conditions are stormy, even if the best ship is still going to have tough times. The weaker ships will sink.”

Musk acknowledged the rough waters that likely lie ahead for the Tesla ship, and waves will consist of high-interest rate environments, which will temper demand for its vehicles as consumers struggle to keep up with inflation and lengthy waits for Cybertruck to contribute positive cash flow for the company.

“We have seen the highest highs and some very challenging times from Tesla and Musk over the last decade, with last night’s quarter and conference call not an inspiring one for the bulls,” Wedbush’s Dan Ives wrote in a note.

“In a nutshell, we would characterize last night’s conference call as a ‘mini disaster’ as the Street wanted to get their arms around the falling margins and constant price cuts seen globally, but instead, we heard from a much more cautious Musk which focused on higher interest rates, FSD/AI investments, and highlighting the difficult path for Cybertruck production over the next 12 to 18 months.”

Ives pushed Wedbush’s price target on Tesla down to $310 from $350, citing a “more cautionary near-term dynamic for Musk & Co.”

Adam Jonas of Morgan Stanley shared similar sentiments, adjusting his price target from $400 to $380.

“How can we be overweight [on] Tesla despite the company’s caution on macro, consumer, Cybertruck and Mexico? Can a ‘growth stock’ work if earnings don’t grow in 2024?” he wrote.

Jonas and fellow Morgan Stanley associates characterized the call as “one of the most cautious Tesla conference calls we’ve heard in years.”

Musk announced that not only would Cybertruck confront Tesla with “enormous challenges” in terms of the initial production ramp and becoming cash flow positive, but that Gigafactory Mexico won’t be a “full tilt” effort until the global economic outlook becomes more stable.

It was not all bad. Model Y is trending to be the best-selling car in terms of revenue and unit value, Autopilot has driven over 500 million miles with Full Self-Driving beta, and energy storage was robust for the quarter. Cybertruck even got a date for the first deliveries, November 30.

Tesla confirms Cybertruck deliveries for November 2023

However, analysts advise investors to be more cautious as Tesla will have more challenges over the next year. As Tesla is not immune to ones that will impact the global markets, and Musk’s cautionary tone for the Call was indicative of the tumultuous waters the automaker will face moving into 2024 and beyond.

Disclosure: Joey Klender owns Tesla stock.

I’d love to hear from you! If you have any comments, concerns, or questions, please email me at joey@teslarati.com. You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at tips@teslarati.com.

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Tesla is expected to release delivery and production figures for 2023’s third quarter sometime early next week, and as the automaker continues to prepare for the launch of the Cybertruck in the United States, Q3 will host the four vehicles of the company’s lineup.

With the Model Y and Model 3 making up a vast majority of vehicle deliveries at well over 90 percent, the Model S and Model X will contribute just a few thousand units to Tesla’s overall delivery and production figures for the quarter.

However, the makeup of Tesla’s delivery number is not what analysts are paying attention to as Q3 comes to a close. Instead, they are looking at the adjustments that needed to be made to its forecast for the quarter, as Tesla indicated earlier this year that factory upgrades would be occurring at its production facilities.

During the Q2 Earnings Call, CEO Elon Musk said:

“We continue to target 1.8 million vehicle deliveries this year, although we expect that Q3 production will be a little bit down because we’ve got some shutdowns to for — a lot of factory upgrades. So, just probably a slight decrease in production in Q3 for sort of global factory upgrades.”

These upgrades required stoppages in production at the factories, and Musk prepared investors and analysts for the possibility that things could be somewhat slow in terms of sequential growth.

Dan Ives of Wedbush is one of the analysts preparing his forecast and estimates for the Q3 delivery figures for the potential drop in production numbers.

Tesla 3Q deliveries likely hit Monday am. While from a demand perspective we believe Tesla was on track to hit 460k/465k in the quarter longer than expected downtimes of the factories in Shanghai/Austin caused likely ~20k units to shift into 4Q. 440k line in the sand our view

— Dan Ives (@DivesTech) September 29, 2023

Ives dropped his estimate from between 460,000 and 465,000 units to 440,000.

“…longer than expected downtimes of the factories in Shanghai/Austin caused likely ~20k units to shift into 4Q,” Ives wrote.

Ives and Wedbush hold an “Outperform” rating on Tesla stock and their price target remains at $350.

Disclosure: I am a Tesla shareholder.

I’d love to hear from you! If you have any comments, concerns, or questions, please email me at joey@teslarati.com. You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at tips@teslarati.com.

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Tesla stock has had one of the more notable stands on Wall Street as a stock that has been bet against by investors and firms for years. However, after the company’s meteoric rally on the market over the past few years, it is evident that short sellers have taken quite a loss from their positions.

Nevertheless, the losses felt by the skeptics of the automaker’s stock have not convinced them to shy away from betting against the most successful electric car company on the planet.

New data from Hazeltree, cloud-based treasury and liquidity management solutions firm, shows that Tesla was the most crowded security for the third consecutive month in the “large-cap category” in the Americas region.

Hazeltree compiles its data by tracking approximately 12,000 global equities across the Americas, Europe, the Middle East, and Africa (EMEA) and the Asia-Pacific (APAC).

Rivian also had the highest Institutional Supply Utilization, meaning it is being shorted by institutions more than any other stock that was analyzed by Hazeltree.

(Data via Hazeltree)

Tesla is still the most-shorted stock, but its low institutional supply utilization, which stands at just 1.84 percent, means large firms are not shorting the stock as frequently as others. The short positions are coming from individual investors.

Over the past three months, Tesla’s institutional supply utilization has dropped, starting at 2.78 percent in June, 2.63 percent in July, and just 1.84 percent in August.

Rivian’s dropped slightly after appearing on the list for the first time in the firm’s July report, which saw their utilization rate at 33.21 percent.

Yesterday, Tesla stock surged 10 percent, helping the company gain billions in value after a note from Morgan Stanley talked optimistically about the Dojo Supercomputer.

Disclosure: I own Tesla stock.

I’d love to hear from you! If you have any comments, concerns, or questions, please email me at joey@teslarati.com. You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at tips@teslarati.com.

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Tesla’s Supercharger Network is the most robust and expansive on the planet, and earlier this Summer, it gained massive attention when it struck deals with various OEMs to allow their EVs to access the charging infrastructure starting in Spring 2024.

While Aptera was the first to have access by adopting Tesla’s North American Charging Standard, or NACS, connector, Ford and General Motors followed suit in two announcements that shook the EV industry.

These partnerships then catalyzed various other automakers, including Rivian, Volvo, Polestar, and others, to make the same move. The adoption of NACS is set to bring Tesla major revenue increases through the rest of the decade, according to Wedbush’s Dan Ives, who is a top analyst covering the automaker and the sector as a whole.

Tesla’s NACS Contributing to Revenue

Ives wrote in a note this morning to investors:

“To dive deeper into this sum-of-the-parts valuation, we modeled & projected out Tesla’s supercharger network, taking into account access & revenues from other OEMs using stations across the United States. Ultimately, we estimate that Tesla’s supercharger business will be roughly 3%-6% of total revenues, translating to a $10 billion – $20 billion business by 2030.”

Ives wrote in the note that while the Supercharger Network opening to OEMs is a major part of the Tesla story, it is just that: one part.

(Credit: Tesla)

Strong production figures, a thriving energy business, continuous improvement on the side of the development of Autopilot and Full Self-Driving, an “unmatched battery ecosystem,” and increased production and scale scope are all contributing to a strong financial sheet for Tesla.

“…we believe Tesla is in a prime position to further capitalize on the EV transformation taking place as part of the government’s plan to reduce carbon emissions to zero by 2050,” Ives wrote.

Cybertruck Deliveries ‘Highly Anticipated’

In addition to the strong revenue stream that will come with the opening of Superchargers to OEMs, other Tesla projects are also set to drive profitability, notably the Cybertruck.

“With the delivery numbers representing its flagship model fleet, the much-anticipated Cybertruck remains a hot commodity in the market with the company taking in 1.5 – 1.8 million reservations,” Ives writes.

Elon Musk teases a ‘production candidate’ Cybertruck at Giga Texas

However, recent figures show over 1.9 million reservations held for the Cybertruck currently.

“While preparing for the launch in FY3Q23, the Cybertruck puts TSLA in a great position to capitalize on the growing need for electric pickups with the electric truck market growing at a 31% CAGR through 2032.”

Full Self-Driving and Its Contributions to Profits

Tesla’s Full Self-Driving suite is another major contributor to the automaker’s growing profitability and will drive the automaker’s total addressable market upward. Continuing to refine the suite’s performance through neural network training, the suite, along with Autopilot, has already contributed over 150 million miles of data.

There are more improvements on the way.

“Last week, the company announced its V12 update, an FSD package with end-to-end AI for improved driving smoothness through turns while enhancing both decision-making and detection in TSLA’s journey with the aim of achieving full autonomy this year,” Ives writes.

Ives holds a $350 price target and an “Outperform” rating on Tesla stock.

Disclosure: Joey Klender is a TSLA Shareholder.

I’d love to hear from you! If you have any comments, concerns, or questions, please email me at joey@teslarati.com. You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at tips@teslarati.com.

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Ben Kallo, an analyst for Baird, included Tesla on the list due to its numerous catalysts that could send the stock even further upward this year.

Already up over 94 percent this year, Tesla shares have rebounded nicely from a slide in 2022, which was caused by macroeconomic conditions outside of the company’s control. Product delays and supply chain issues have caused turmoil for nearly every automaker over the past three years.

Tesla is primed to finish the year close to up over 100 percent this year as long as nothing catastrophic happens to the automaker as Q3 comes to a close.

Kallo lists several things in terms of catalysts that should help Tesla stock continue its monumental climb in 2023 (via MarketWatch):

“Potential upcoming catalysts for the stock include Cybertruck launch, a wider-scale adoption of [Full Self Driving, Tesla’s suite of advanced driver assistance systems to navigate city streets], continued growth in the energy business, expanding into new markets, and a possible AI Day, among others.”

Tesla’s Cybertruck is moving closer to deliveries. This morning, more Cybertrucks left Giga Texas, and headed presumably toward the Fremont Factory, where a fleet of pickups made it last week.

Tesla Cybertrucks are leaving Giga Texas in flocks

CEO Elon Musk has said for years that Full Self-Driving will be solved “this year,” and while we are skeptical that will happen in 2023, Tesla’s FSD suite is more robust than its ever been.

Baird has an “Outperform” rating on the stock and a $300 price target.

Tesla shares are currently up nearly 7 percent at the time of publish, which is 3:29 PM on the East Cost.

Disclosure: Joey Klender owns Tesla stock.

I’d love to hear from you! If you have any comments, concerns, or questions, please email me at joey@teslarati.com. You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at tips@teslarati.com.

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According to the investor platform Say, Tesla shareholders are eager to ask CEO Elon Musk and other executives of the electric automaker about various things that will affect the company’s performance on Wall Street and the overall outlook of the company for the rest of 2023 and beyond.

Here are the five top questions that retail investors are hoping to gain more information on during tomorrow’s call:

1. Has any automaker approached Tesla to license FSD?
   • • Musk recently said that “Tesla aspires to be as helpful as possible to other car companies,” and indicated that he would be open to licensing Autopilot or Full Self-Driving to rival automakers. With Ford, GM, and others already developing their own programs, Tesla would likely license Autopilot or FSD to a startup company. However, there is always the potential that one company adopting it would catalyze many others to make the same choice, just as it did with Ford’s choice to adopt NACS.
2. Have you considered allowing FSD transferability as a level to allow existing customers to upgrade to a new Tesla instead of being locked into existing cars due to the price of FSD?
   • • Tesla has not allowed the transferability of FSD to a new vehicle, and we don’t anticipate this to happen anytime soon. Musk has said FSD’s current price is a bargain compared to what it will be worth when the suite is complete. There is too much money to be made by Tesla from people who want FSD on multiple vehicles, and trading in your car will likely require you to buy the suite again.
3. When will you give more information about out Cybertruck orders? Estimated delivery schedules, pricing, and specifications?
   • • We expect Tesla to reveal information about the Cybertruck during this Earnings Call, as the first production units have already rolled off of lines based on images shared by the company last weekend. It is truly unlikely Tesla doesn’t tell customers what they should expect to pay before the delivery event.
4. As you open the Supercharger Network in North America to other EVs, do you plan to accelerate anticipatory investments in Supercharger expansion to avoid congestion and how will you deal with long lead times to upgrade electric T&D services to these areas for multi-megawatt loads?
   • • Tesla has a major task on its hands with the Supercharger Network being open to various car companies. Battling congestion will be interesting, especially as these companies are going to be sharing the same 12,000 locations. However, the company is opening a new site every 11 hours, which has improved from every 12 hours, on average, in June, and every 13 hours in May.

   NEWS: @Tesla is currently opening an average of one new Supercharger site globally every ~11 hours.

   This compares to one opening every ~12 hrs last month, and one every ~13 hrs the month prior to that. @TeslaCharging pic.twitter.com/7GmcPlGQaH

   — Sawyer Merritt (@SawyerMerritt) July 13, 2023

5. What is the status of the 4680 cell? How far are you from the specs you laid out on Battery Day? When do you expect to achieve what you laid out on Battery Day?
   • • Tesla has built 10 million cells in Texas, countless others in Fremont, and the 4680 project is obviously coming along at a reasonable pace. As far as how far the company is from reaching what it laid out in 2020 at Battery Day, there is no need to speculate. It is a matter of getting raw materials and ramping manufacturing to a point that Tesla is not confined on the cells.

Tesla will report its Earnings tomorrow at market close with the release of its Shareholder Deck. A call with Musk and other executives will follow.

Disclosure: Joey Klender is a TSLA Shareholder.

I’d love to hear from you! If you have any comments, concerns, or questions, please email me at joey@teslarati.com. You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at tips@teslarati.com.

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Tesla is set to report delivery and production numbers for the second quarter either late this weekend or early next week, and the consensus is split among Wall Street analysts who are conflicted with how strong the automaker’s figures will be.

As the EV race heats up, Tesla continues to establish itself as the overwhelmingly clear leader of the sector. Other automakers are even conceding that dealing with Tesla is a necessary step in achieving their own EV goals, as several companies have signed deals to adopt the company’s charging connector and access 12,000 of its North American Superchargers.

Analysts of both Global Equities Research and Bernstein discussed potential demand triggers for Tesla moving forward, and while one firm is convinced job creation in the AI field will help the company sell more cars, the other is unconvinced that Q2 numbers will be as robust as the Street expects.

Global Equities Research says it expects Tesla demand to “recover” as previously laid-off tech workers will be finding new employment due to the AI boom. When the firm asked several of these workers what large purchase they will make when they find work once again, the top answer was “Buy a Tesla.”

RELATED: 

Deutsche Bank adopts optimistic Tesla stance ahead of Q2 delivery report

The note also expects normalized demand to be seen once again in Q4, with a slight recovery in Q3.

Meanwhile, Bernstein analyst Toni Sacconaghi believes Tesla’s “demand obstacles” that it has faced in 2023 come from a lack of new car releases.

“Our perspective is that upcoming numbers won’t be great,” he said to CNBC. In his opinion, Tesla will be forced to continue with the price cuts it has used throughout the year to surge sales in order to reach its sales goals.

Additionally, new, lower-priced models from competitors are diluting Tesla’s chances to win sales over other automakers, he said.

“That’s the challenge over the next four to six quarters before we have some new, lower-priced models. That’s our concern: that Tesla will ultimately fall short on deliveries at some point over the next four to six quarters, or that we’re going to see continued price cuts to be able to drive that growth.”

Wall Street is expecting 445,000 deliveries from Tesla in Q2, a 74 percent uptick year-over-year.

Disclosure: Joey Klender is a TSLA Shareholder.

I’d love to hear from you! If you have any comments, concerns, or questions, please email me at joey@teslarati.com. You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at tips@teslarati.com.

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“While we do agree with the merits of classifying Tesla as an ‘AI company,’ we would urge caution against grouping all aspects of AI (for example, LLM with vision-based neural network training) into one bucket. As a result, we believe Tesla’s current valuation is relatively ‘full,'” Jonas wrote.

Jonas and Morgan Stanley upgraded their price target to $250 from $200.

Tesla has experienced a dramatic upturn in value over the past several weeks, mostly due to the various agreements it has reached with rival automakers to open its Supercharger Network and expand the use of the NACS connector.

However, Jonas says, “I have to be up-front with you all. While the team has defended the Tesla OW rating all year, I did not see this 111% YTD rally coming (the S&P 500 is up 14% YTD, for context).”

Tesla stock pops on Rivian deal, continuing surge toward $1T market cap

Despite the monumental climb, Jonas is recommending investors still proceed with caution, and that includes not mounting their position with additional shares, which is why the firm downgraded the stock from ‘Overweight’ to ‘Equal Weight.’

Despite Jonas’s advisory that would caution investors to consider it an automaker and “an AI beneficiary,” many other bulls have considered the company a mainstay in AI, especially with its self-driving efforts.

For example, Cathie Wood of ARK Invest has put major emphasis on the company’s bull case, which has the stock price at $3,000 by 2025, and it is mostly fed by the automaker’s Robotaxi fleet, which has yet to be established.

Tesla bull ARK Invest estimates robotaxi fleet launch dates

However, this is where definitions get confusing, as Jonas is cautious to consider Tesla’s AI and self-driving efforts as two different things:

“Autonomous driving and generative AI still remain, in our view, two very different technological disciplines. While the market may want to dream on the AI theme, we’d prepare to wake up to the sound of a blaring car horn.”

Tesla shares are trading up over 1.3 percent at 2:13 PM on the East Coast.

Disclosure: Joey Klender is a TSLA Shareholder, but does not own RIVN stock.

I’d love to hear from you! If you have any comments, concerns, or questions, please email me at joey@teslarati.com. You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at tips@teslarati.com.

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Rivian became the third major automaker to adopt Tesla’s NACS connector, following Ford and General Motors, both of which announced partnerships with Tesla earlier this month.

Tesla to open 12,000 Superchargers to Ford across U.S. and Canada

The NACS connector will give Rivian vehicles access to all Tesla Superchargers without needing an adapter in 2025. Next Spring, Tesla will open 12,000 locations to all three automakers, but the vehicles will need an NACS adapter to charge.

Rivian made the announcement that it would adopt Tesla’s NACS connector this morning.

“Today, we signed an agreement with Tesla to adopt the North American Charging Standard. This opens charging for Rivian vehicles on Tesla’s Supercharger network across the United States and Canada. Access starts as soon as Spring 2024,” the company said.

Tesla shares popped over 3 percent on the news as of midday trading. Rivian shares were also trading at over 4 percent higher than they opened.

Tesla is surging back toward its potentially $1 trillion market cap, which it gained in 2021. Tesla shares suffered last year, but positive news has helped the automaker regain traction on Wall Street in 2023. So far, it is up over 128 percent this year.

The automaker has also had its stock pushed upward due to its Model 3’s prequalification for the $7,500 tax credit across the entire vehicle lineup. Previously, only one configuration of the Model 3 was eligible for the full tax credit amount, but a restructuring of which battery packs would be fitted into U.S. vehicles helped Tesla regain the full $7,500 credit for all three cars.

The question that still looms is what company will be the next to adopt NACS? Hyundai seems to be the most apparent, as the automaker is reportedly mulling the possibility of adopting the connector for its EVs, which would let its drivers gain access to the Tesla charging network.

Disclosure: Joey Klender is a TSLA Shareholder, but does not own RIVN stock.

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Tesla shares rose more than 40 percent over the past 13 trading days as its market cap continues to rebound toward the $1 trillion level it once held. North of $800 billion, Tesla is the world’s most valuable automaker, holding a substantial lead over Toyota, which holds a valuation of $223.96 billion.

The gains were fed by numerous bits of positive news over the past few weeks. It initially started with the announcement of all three Model 3 trim levels qualifying for the full $7,500 tax credit.

However, more substantial developments came through over the next several weeks in relation to Tesla’s Supercharger Network and the North American Charging Standard, or NACS, connector that the automaker uses.

Ford and GM will adopt the NACS on their vehicles beginning in 2025. The automakers will also have access to 12,000 North American Supercharger locations starting next Spring.

The automakers have not been the only companies to adopt Tesla’s NACS connector, as a variety of charging companies have also committed to using it.

Tesla Investors have felt the benefits of the 137 percent gain so far this year, but short sellers cannot say the same. After last year, when Tesla stock fell considerably, the automaker has rebounded, and skeptics of Elon Musk’s electric automaker have lost $5.05 billion this month alone. For the year, a $12.7 billion cumulative loss has certainly hurt their portfolios.

The data comes from S3 Partners, a financial analytics firm (via MarketWatch).

Tesla shares were trading at $257.60 at the time of publish.

Disclosure: Joey Klender is a TSLA Shareholder.

I’d love to hear from you! If you have any comments, concerns, or questions, please email me at joey@teslarati.com. You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at tips@teslarati.com.

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