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Tesla stock tumbled as much as 13% on Wednesday after the company's second-quarter results offered limited reassurance to eager investors.
The leading electric-vehicle maker reported adjusted EPS of 52 cents per share, missing the consensus estimate of 60 cents. It marked the fourth straight quarter Tesla has fallen short of analyst forecasts.
CEO Elon Musk also said the company's much-anticipated Robotaxi event would be postponed until October 10. The taxi's unveiling, seen by many on Wall Street as a major AI-driven catalyst for Tesla, was originally scheduled for next month.
"Tesla's muddling through the EV recession," Morgan Stanley analyst Adam Jones wrote, citing a quarter-over-quarter drop in capital expenditures.
The sharp loss dragged other EV stocks lower on Wednesday. Fellow US manufacturers Lucid and Rivian fell as much as 6.6% and 8.3%, respectively. Other companies in the red include Polestar (-4.6%), Zeekr (-6.9%), Vinfast (-5.9%), Workhorse (-3.4%), and Nikola (-5.2%).
The losses extended to Chinese names, with Xpeng, Nio, and BYD falling at least 2%.
While the EV sector saw a vehicle-delivery resurgence earlier in the quarter, the environment is getting increasingly difficult as consumer demand shifts toward cheaper hybrid models.
This week offered more clues of the so-called EV recession after General Motors announced it would delay plans for an all-electric vehicle manufacturing plant and its new Buick EV model. Its stock is down nearly 5% this week, despite beating second-quarter estimates.
For Barclays analyst Dan Levy, Tesla's report should persuade investors to focus on its fundamentals once again. The stock is up 20% from a month ago, as the company's tech ambitions once again fell into the spotlight.
This run-up is why Cantor Fitzgerald analyst Andres Sheppard has now downgraded the stock to neutral.
But not everyone on Wall Street has soured over the Tesla report. For instance, Gene Munster of Deepwater Asset Management cited long-term bullish catalysts, including Tesla's pledge to create full self-driving cars and humanoid robots.
Wedbush Securities' Dan Ives echoed the optimism, touting that the firm's upcoming Robotaxi day should trigger a new wave of growth. He continues to hold a $300 price target on Tesla.
Even Sheppard lifted Tesla's price target from $230 to $245, citing record growth in the company's energy storage and deployment segment. This battery sector deployed 9,400-megawatt hours in the second quarter.
