After the U.S. stock market opened on Thursday (October 19), Tesla's stock price fell significantly. During the period, it fell 9.8% to US$218.67 per share. Now it has slightly narrowed the decline to US$221.50. The market value has evaporated by approximately US$67 billion compared with yesterday. After the market closed on Wednesday, the electric vehicle leader announced its latest financial results: Q3 quarterly revenue of $23.35 billion, adjustedEarnings per share were $0.66, below market expectations of $24.1 billion and $0.73 respectively. The companyFor the first time since Q2 2019, both fell short of expectations.


The report also showed that Tesla’s third quarterNet profit was recorded onlyUS$1.853 billion, a year-on-year decrease of 44%; gross profit margin alsofell to 17.9%, compared with 25.1% in the same period last year; in addition, its industry-leading operating profit margin alsoIt was cut in half to 7.6%, which is comparable to many traditional car manufacturers.


These data reflect the negative impact on profits caused by sharp car price cuts. Even so, Tesla CEO Elon Musk still said during the conference call, “The importance of cost cannot be overstated...We have to make our products more affordable so people can afford them. "

Musk explained: “I’m very excited about the high level we’re at.Interest rate environment is worrying. People who buy cars focus on how much they have to pay each month. If interest rates remain high, or even higher, it will be much more difficult for people to buy cars. "

In addition, Musk also made cautious comments about the electric pickup truck Cybertruck and the Mexican Gigafactory. He believes that the CybertruckIt will take 12 to 18 months to become a significant positive cash flow contributor, and due to global economic conditions, the companyIt’s not ready to go “all in” with the Mexican factory.

After the call, Bank of America analysts reiterated their neutral rating on Tesla stock and lowered their expectations for the stock price in light of "lower gross margins." "It's interesting that Musk has devoted a lot of time to studying the broader macro environment and the impact of current high interest rates."

Other analysts also expressed some surprise that Musk devoted so much time to discussing the global economy. Morgan Stanley analysts said Tesla's third-quarter results were disappointing and cautious comments around the economy set the tone for the stock's reaction,"This is the most cautious Tesla call we've heard in years."

During the day, Morgan Stanley lowered Tesla's target price from $400 to $380 per share. In addition, Wells Fargo, Citigroup and Tesla's "big bull" Wedbush have also lowered their target prices to between US$250 and US$310.


Deutsche Bank analysts wrote that a range of evidence "reinforces our concerns that the company faces fundamental challenges next year."