Tesla faces a financial report test this week, will there be more good news for the affordable Model 2 and Robotaxi?

Affected by the continuous decline in deliveries, Tesla's Q2 performance is expected to be unsatisfactory, and the market will focus on its non-automotive business.

After the U.S. stock market closed on Tuesday, July 23, Tesla will announce its second-quarter performance for 2024.

Considering that Tesla's sales growth is slowing down, the market currently expects that its performance for this year "will not be very ideal." However, better-than-expected second-quarter delivery data and strong energy deployment data may boost Tesla's long-term growth prospects.

According to analysts surveyed by FactSet, Tesla's Q2 revenue is expected to be $24.3 billion, a 2.4% year-on-year decrease, with adjusted earnings per share of 61 cents, a 33% year-on-year decrease.

Earlier data shows that Tesla delivered 444,000 vehicles in Q2, exceeding expectations, maintaining its position as the global leader in electric vehicle sales. However, the news of the delay in the release of the Robotaxi autonomous taxi service by two months led to a sharp drop in Tesla's stock price.

Since the beginning of this year, Tesla's stock price has cumulatively declined by 3.71%.

Focus on Non-Automotive Business

Despite challenges such as declining deliveries and the delayed release of Robotaxi, investors still value Tesla's growth opportunities in areas such as Robotaxi and FSD technology.

1) Latest Release Date for Robotaxi

Considering Tesla's recent announcement of the delay in releasing Robotaxi, it is expected that Musk will emphasize the latest release date for Robotaxi during this earnings call.

Ark Invest, owned by "Cathie Wood," recently mentioned publicly that most of Tesla's business value comes from Robotaxi, believing that the latter will change Tesla's business model: from one-time revenue from selling electric vehicles to recurring revenue from RoboTaxi.

2) Adoption Rate of FSD TechnologySome analysts point out that Tesla's current valuation is heavily dependent on the success of its FSD technology. If this technology is lost, the company's valuation could shrink by at least $100. As for this financial report, the market will focus on the adoption rate of FSD.

Some opinions suggest that the market's interest in Tesla's progress in AI is due to the company's massive driving data, which gives it a significant advantage in AI training. The FSD technology with AI technology support "may disrupt the entire autonomous driving market."

The current risk facing this business is that with the increasing probability of Trump's re-election, he may reintroduce anti-electric vehicle legislation after taking office.

3) Energy Business, Optimus Timeline

In terms of other AI businesses, the market may focus on the Optimus commercial plan timeline.

Additionally, Tesla also set a record in the second quarter with a deployment of 9.4GWh of battery energy storage, the highest deployment in a single quarter for the company. Currently, Tesla Energy's profit margin is higher than its solar and automotive businesses, and shareholders are likely expecting to hear more details about energy projects.

After the second-quarter delivery announcement, Morgan Stanley increased the proportion of the energy business in its Tesla rating and raised the valuation of this business by 40%. Several investment banks such as Citi and Mizuho also raised Tesla's target price, stating that future growth will mainly come from the execution of artificial intelligence projects, especially Robotaxi and Optimus humanoid robots.

Long-term Confidence in the Automotive Business

In the current core automotive business, the market is eagerly awaiting the latest news on the affordable Model 2 in the earnings call.

Barclays analyst Dan Levy and his team believe that Tesla's investment theme has shifted from growth driven by the automotive business to growth driven by AI businesses such as autonomous driving and Robotaxi, but the overall plan still needs details:

"While we appreciate the potential disruptive opportunities brought by these businesses, we believe they bring uncertainty to Tesla's future path, making the company's success dependent on binary outcome bets."

Levy stated that Tesla is significantly ahead in the global electric vehicle transformation and the "software-defined vehicle (SDV)" field, and the positive outlook for its sales will keep it in a favorable position in the long term.

Some analysts point out that the entire electric vehicle market is huge, and the penetration rate is just beginning to grow. They remain confident in Tesla's leading advantages in electric vehicles and autonomous driving, attributing the decline in delivery volume in the first two quarters to other brands launching new electric vehicle models to grab market share