The electric automaker posted profit margin that fell to a five-year low on Tuesday and its earnings missed estimates for a fourth straight quarter.
Its market value before trading opened on Wednesday was $785 billion, far exceeding any other global auto company, but that valuation is based on it profiting from technologies that are not expected to bear fruit for some time, analysts said.
As a result, shares have suffered, losing 10% over the past two years during a period when the S&P 500 index has gained more than 40%.
"All of Musk's enthusiasm on the call, outside of (energy) storage, were for products that don't exist," said TD Cowen's Jeff Osborne.
Tesla's EV deliveries have fallen for two straight quarters, and it has not introduced a lower-cost model that many expected, causing buyers to turn to rival EV makers. China's BYD (002494.SZ), for instance, widened its sales lead over Tesla in Singapore in the first half of 2024.
Tesla has been forced to cut prices and boost incentives to drum up sales of its aging vehicle line-up. Musk said rivals "have discounted their EVs very substantially, which has made it a bit more difficult for Tesla".
The company said the cheaper models it expects to bring out in the first half of 2025 would result in less cost reduction than previously expected, while delaying a widely awaited event for its robotaxi to October.
"Tesla is not being priced on auto, but autonomy and AI ... We believe any payoff from (Tesla's AI) initiatives are further out," wrote UBS analyst Joseph Spak, reiterating a "sell" rating on the stock.
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Tesla shares were at $218.26 in early trading, setting them on track to lose more than $90 billion in market value.
The stock trades at 85 times its 12-month forward earnings estimates, compared with 6.91 for legacy automakers like Ford.
He also launched a poll asking users on X if Tesla should invest $5 billion in his AI startup xAI - a quarter of which he plans to keep for investors in X. The value of X, formerly Twitter, has plunged since his $44 billion purchase of the platform.
Some Wall Street analysts questioned whether the 2025 timeline for robotaxi, which is now expected to launch on Oct. 10, was realistic.
"Tesla makes great cars and is likely stuck in a Level 2++ world of autonomy for several years. Eventually they may get to full Level 4 for widespread availability toward the end of the decade, if at all," said TD's Osborne.
The company's price cuts and incentives pushed automotive gross margins excluding regulatory credits down to 14.6% in the second quarter.
Despite the disappointing results, only one of the 50 analysts covering the stock cut their rating, while there were three price target increases and two decreases, per LSEG data.
Analysts, on average, still rate the stock a "hold" though their median price target of $212.50, the data shows.
