Already a subscriber?There was a moment on Tesla’s June quarter earnings call on Tuesday night that should get everyone thinking about where the artificial intelligence revolution might end up.
“At that point, I am not sure what money even means,” Musk said, suggesting that the AI revolution would usher in an age of abundance that is currently unthinkable. “Anyone will be able to have pretty much anything they want.” This stock is now a battleground between the believers who are prepared to look past the growing challenges in Tesla’s real-world business to this AI future, and the doubters who see a company struggling to catch its next growth wave.
The pressure on profits is set to persist. European tariffs on EVs manufactured in China have hurt Tesla’s production in that country, while tariffs on raw materials are also pushing up production costs. Tesla’s strategy of shifting production to low-cost countries like Mexico is also now under threat. Musk says Donald Trump’s threat of tariffs against Mexico means Tesla has little choice but to wind back its investment there for now.
A big investor presentation on the robotaxi business model scheduled for August 8 has now been pushed back to October 10, and it’s not clear exactly what we’ll get then. A concept? A working prototype? A business model that still requires technological advances and regulatory approval? Investors want detail, and what they’re getting is blue sky.
So what did we really learn from Tesla’s June quarter earnings? For all of Musk’s malarky, he has neatly defined the issue facing investors.