“Tesla’s financial performance is more erratic than a learner driver, having now missed earnings expectations for the fourth quarter in a row,” says Dan Coatsworth, investment analyst at AJ Bell.
“The company always seems to be desperate to work on the next initiative rather than making sure the existing business is running smoothly. That raises the risk it is juggling too many things at once and not focusing on the bread and butter, instead preferring to look for another new toy to play with.
“There is a lot of talk about robotaxis, humanoid robots and autonomous driving, which provides an exciting narrative for investors but doesn’t get over the fact that these are tomorrow’s potential riches, not today’s. The stark reality is that Tesla’s profits have plummeted and that’s not what investors should expect from a business.
“Slashing prices certainly helps to address concerns about affordability, but that has led to lower profit margins. Plans are afoot to launch more affordable models and while that should make Tesla appeal to a broader group of drivers, it may still be a year or more until mass production of these vehicles gets underway.
“Tesla needs to find a better way to thrive in a more difficult environment for electric vehicles now rather than later. It’s clear that the pace of adoption is slower than expected – people still have concerns about battery range and whether there are enough experts to fix vehicles when things go wrong. Competition is also increasing and Telsa’s first mover advantage is fading away.”
