Tesla shares extended their decline in Thursday’s pre-market session, falling as much as 6.60%, after closing 4.42% lower in Wednesday’s after-hours trading.
The drop followed Elon Musk’s warning that the company “probably could have a few rough quarters” as U.S. incentives are set to expire on September 30.
“Well, we’re in this weird transition period where we will lose a lot of incentives in the US,” Tesla’s chief stated.
“Slab incentives actually in many other parts of the world. But we’ll lose them in the US,” he added. “Across all of it at the relatively early stages of autonomy. On the other hand, autonomy is most advanced and most available from a regulatory standpoint in the US.”
“Does that mean we could have a few rough quarters? Yeah. We probably could have a few rough quarters. I’m not saying that we will, but we could. Q4, Q1, maybe Q2,” he concluded.
Shortly after the earnings call ended, Barclays analyst Dan Levy reiterated an Equalweight rating and $275 price target on Tesla, saying it “reminded us that fundamentals remain choppy, and are likely to deteriorate in the coming quarters.”
The target implies a downside of about 17% based on Wednesday’s closing price.
Truist Securities analyst William Stein reiterated both the rating (Hold) and the price target ($280), describing Tesla‘s quarter as “noisy” but noting that earnings per share and revenue “were inline.”
Tesla’s CFO Vaibhav Taneja said on the call that the production ramp-up of the long-anticipated affordable EV model will proceed “slower than initially expected” as the company focuses on delivering as many cars as possible in the US before the EV credits expire by the end of September.
Cantor Fitzgerald said in a research note released before the call that the results beat the firm’s estimates on both revenue and earnings per share but missed on free cash flow.
