OVERLOOKED TAKEAWAYS FROM TESLA EARNINGS

EV Channels Review

Rob Maurer delves into Tesla's Q3 earnings, highlighting an often-overlooked point regarding operating margins. He emphasizes that excluding regulatory credits and the ramp-up costs in Austin and Berlin, Tesla's automotive gross margin would have approached 30%, significantly higher than reported. This suggests a substantial, albeit temporary, drag on current profitability from these new factories. Maurer also addresses the stock's negative reaction, attributing it partly to the earnings miss and the ongoing overhang from Elon Musk's potential stock sales related to the Twitter acquisition. He argues against interpreting Musk's positive comments as a precursor to selling, citing historical behavior. On production and deliveries, while acknowledging Tesla might slightly miss the 50% annual growth target for deliveries due to cars in transit, Maurer stresses that the underlying growth, especially the projected 27% sequential increase in Q4 production, remains exceptionally strong and exceeds analyst expectations. The core takeaway is that Tesla's underlying business strength is being masked by temporary factors and market noise.