Amid investors' concerns about the first-quarter results, Tesla's stock price ushered in a "seven-day losing streak".
At the close of U.S. stocks on Monday, Tesla's shares closed down 3.4% at $142.05, the seventh consecutive session of declines and the lowest since January 2023. Tesla is down 43% for the year, making it the second-worst component of the S&P 500.
Tesla rebounded violently after the first two consecutive seven-day declines (+50% in September 2018 and +100% in the next two months in December 2022)......
Tesla tied the record for the longest consecutive days of decline, with significant gains in September 2018 and December 2022 after falling for seven consecutive days
This time, in the face of many doubts from Wall Street, can Musk's RoboTaxi and FSD gambles "turn the tide" again?
Negative events continue to be staged
Last week, Tesla slashed prices in the U.S., China and across Europe, with its best-selling Model Y SUV and entry-level Model 3 sedan slashing by as much as $2,000. Tesla has also cut the price of its advanced driver assistance system, Full Self-Driving (FSD), by a third.
At the same time, Tesla announced a recall of 3,878 electric pickup trucks in the U.S. due to the risk of getting stuck on the accelerator pedals of these vehicles, which could cause safety concerns.
The recall notice and the new round of price cuts come after Tesla had embarked on a difficult restructuring, informing employees earlier last week that it would lay off more than 10% of its workforce, involving 14,000 employees. Layoffs are still ongoing, and it has been reported that some employees have been notified of their dismissals in the past few days.
According to media reports on Monday, Musk has pushed for a 20% layoff, which means that more than 20,000 jobs have been eliminated.
On April 23, it was reported that when Tesla implemented company-wide layoffs, Musk would only be established for 4 months, and the traditional marketing team focusing on producing car advertisements was "all fired", and the leaders were also laid off.
According to sources familiar with the matter, the media quoted the "growth content team" of the marketing team based in the United States as all laid off. The team, which specializes in creating car advertising for Tesla, consists of about 40 employees and is led by senior manager Alex Ingram. Of course, two leaders, Alex Ingram, and Jorge Milburn, who is in charge of the global team, were also fired.
Bearish events continue to be staged, exacerbating the market's concerns about Tesla's first-quarter earnings report. Tesla plans to announce its first-quarter earnings report and hold an earnings call after the U.S. stock market in the early hours of Wednesday morning Beijing time.
Tesla will have its worst earnings report in seven years?
The most obvious evidence of the deterioration in Tesla's first-quarter earnings report is the first-quarter delivery data.
In early April, Tesla's first-quarter auto production and delivery report showed that Tesla's deliveries fell 8.5% year-on-year to about 386,800 units, a month-on-month decline of more than 20%, far lower than analysts' previous expectations of 449,000 units, and the largest shorter-than-expected increase on record.
Disappointing delivery figures, coupled with a new round of price cuts, have put pressure on Tesla's profits, and analysts seem to have a consensus expectation for this.
Barclays analyst Dan Levy expects Tesla's gross margin to hit its lowest level in the first quarter since early 2017. In early 2017, Tesla had just begun production of its first mass-market model, the Model 3.
According to HSBC, analysts expect Tesla's first-quarter revenue to decline by 5.1%, which will be the first year-on-year decline in revenue since the pandemic affected operations in the second quarter of 2020.
According to media surveys, analysts expect Tesla's profit per share in the first quarter to be $0.48 and revenue to be $20.94 billion, compared to Tesla's revenue of $25.17 billion in the fourth quarter of 2023 and $23.3 billion in the first quarter of 2023.
Model 2 and Robotaxi will be the focus of the call
"Investor sentiment towards Tesla has deteriorated since the end of 2022," BofA analyst John Murphy wrote in a Monday note. He expects investors to be "highly focused on comments related to growth plans", particularly the Model 2, a next-generation electric vehicle, and Robotaxi, a robotaxi.
On April 5, media reported that Tesla had abandoned the development plan for the Model 2, a low-cost model, and shifted its focus to developing a Roborobotaxi. Musk quickly came forward to deny it, calling it untrue, but then announced that it would officially release Robotaxi on August 8.
Levy said the Model 2 will likely get the most attention, but don't expect a satisfactory answer.
Musk has said that Tesla is "basically worth $0" without self-driving. In tomorrow's call, he needs to explain and prove to investors that it is not just fooling investors by turning to Robotaxi, but that Robotaxi can bring new light and hope to the company in the haze of declining profit margins.
He expects Tesla's free cash flow to be "moderately negative" in the first quarter, which would be the first negative free cash flow since the start of 2020.
UBS analyst Joseph Spak wrote in a note on Monday that investors should "expect some small sparks" to appear on the call. He added that Tesla's gross vehicle margin (excluding environmental subsidies) and free cash flow will be key indicators.
Spak agrees that there is a possibility that free cash flow will turn negative in the first quarter. He said cash flow has become even more important to Tesla because the current environment does not allow Tesla to launch both Robotaxi and Model 2.
Tesla falls, and the bears are full
As Tesla's stock price plummeted, the big bears ushered in "spring".
As of Monday morning, Tesla had a short position of about 111 million shares, or 4% of the outstanding shares, with a notional value of $16.3 billion, according to S3 Partners.
Traders who have shorted Tesla have made about $9.4 billion so far this year, making it the most profitable short position in the U.S. market, far surpassing Apple's $3 billion.
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