Tesla Posting Record-Breaking H2 Deliveries 'Somewhat' Out Of Elon Musk's Control: Munster Shares Insights From Q2 Call

Tesla, Inc. TSLA reported mixed quarterly results on Wednesday and the stock reacted with a move to the upside in after-hours trading.

Noted Tesla analyst and Loup Fund co-founder Gene Munster sifted through the information gleaned out of the company’s earnings call.

Tesla CEO Elon Musk mentioned on the call that the company would have record-breaking second-half deliveries. This is something that is "somewhat out of his control," Munster said. 

Musk also flagged softer margins due to the scaling of production.

Munster’s Key Earnings Call Takeaways:

  • Musk reaffirmed that the broader rollout of the full-self-driving feature is on track this year. Munster is of the view the recent departure of Tesla’s ex-AI executive Andrej Karpathy isn’t a measurable headwind to the timing of the FSD release, given the company has a team of 120 people in the software AI group.
  • The Tesla CEO also said in his prepared remarks that FSD users now number 100,000. Munster said this is ahead of his estimate of 50,000.
  • The company announced that AI Day 2.0 is being pushed from August to either September or October. The shift, according to the Loup analyst, is due to Karpathy leaving.
  • Tesla CFO Zach Kirkhorn said the delivery growth target of 50% is difficult but doable. Kirkhorn also hinted at margin pressure due to the ramp of the Giga factories in Austin and Berlin.
  • Musk mentioned carbon, steel, and aluminum prices are falling. Munster expects this to positively impact margins in early 2023.
  • Read Benzinga’s story on Tesla’s Bitcoin disposal in Q2

 

Munster’s Read Of Q2 Results:

  • Tesla’s gross margin, excluding regulatory credits, contracted to 26.2%, Munster noted. The softer margin is despite the average selling price increasing by 5%.
  • The company suggested most of these costs, related to forex impact, Shanghai shutdown, and ramp-up of Austin and Berlin Gigafactories will work themselves out.
  • With Tesla reiterating its 50% delivery growth target, it has to sell about 835,000 cars in the second half, Munster said.

 

Price Action: Tesla closed Wednesday’s session up 0.80% at $742.50 and surged another 1.5% to $753.68 in after-hours trading, according to Benzinga Pro data.

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Posted In: Analyst ColorEarningsNewsTop StoriesAnalyst RatingsTechElon MuskGene MunsterLoup Funds
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