Riding Through the Storm
While the electric-vehicle manufacturing industry faces a downturn, Tesla, Inc. stands strong under the stewardship of Elon Musk. The company has adeptly expanded its ancillary businesses, earning accolades from Morgan Stanley’s analyst.
Top Auto Pick Reinforcement
Morgan Stanley’s Adam Jonas reiterated Tesla as the top pick in the U.S. auto industry, commending the company’s diversification strategy. Despite challenges in the core auto business, Tesla remains focused on mitigating risks while investing in other innovative avenues such as stationary energy, compute infrastructure, and robotics.
Urgency of Cost Control
Even though Tesla’s shares have dipped significantly from their peak, Jonas emphasizes the importance of cost containment. As the company navigates through a drop in estimates and margins, demonstrating effective cost control becomes paramount to aligning its business model with the AI trend.
Source: Benzinga Pro
Tesla’s 2024 outlook projects a GAAP operating profit of $5.6 billion, but after considering various factors, the core auto business appears marginally profitable. Despite challenges, a significant portion of Tesla’s expenses goes towards non-auto functions like AI infrastructure.
Robotaxi Expectations
The highly anticipated Robotaxi Day, slated for October 10, is expected to showcase Tesla’s advancements in fully autonomous driving. However, Jonas cautions against overly optimistic projections, highlighting Tesla’s current permits for autonomous vehicle testing.
In premarket trading, Tesla’s stock witnessed a marginal decline to $228.24.
Stay updated on Benzinga’s Future Of Mobility coverage for more insights.