Episode summary
Instant Reaction: Tesla's Earnings Miss Wall Street Expectations | Bloomberg Intelligence
Bloomberg Intelligence
· · Hosts: Carol Massar, Tim Stenovec · Guests: Steve Man, Ross Gerber
Summary
Tesla reported second-quarter results that missed Wall Street on both earnings and revenue, with adjusted earnings of 40 cents per share and revenue down 12% to $22.5 billion, the steepest decline in at least a decade. The report was calmer than some investors feared because Tesla repeated that robotaxi and affordable-vehicle plans are still moving ahead, and gross margin came in better than expected.
One guest, Steve Man, argued the headline miss looked worse than the underlying details. He pointed to automotive gross margin excluding credits, which he said improved versus the first quarter, and to free cash flow, which was pressured by an extra $900 million of capex tied to future products. He said Tesla needs more visibility on its outlook, but also emphasized that the cheaper model, the Model Y ramp, and international expansion could support future margin and cash flow.
Ross Gerber took the opposite view, saying the business is still declining and that Elon Musk’s image is a core problem for demand. He said he has continued selling Tesla and is out of the stock in his ETF, while arguing that the company should focus on EVs, energy storage, and a low-cost vehicle rather than robotaxi hype. He also said Tesla trades at a valuation that is hard to justify when earnings are falling.
Key takeaways
- Steve Man said the earnings miss was less important than Tesla’s lack of visibility on guidance and future execution.
- Man argued Tesla’s automotive gross margin excluding credits improved to 15% and beat consensus, even as reported results disappointed.
- Man said Tesla’s extra $900 million of capex was tied to the cheaper model and Cybercab, and could support future free cash flow.
- Ross Gerber said he has kept selling Tesla and is out of the stock in his ETF because the business is declining.
- Gerber argued Tesla’s biggest problem is demand damage from Elon Musk, not robotaxi headlines.
- Gerber said Tesla needs a low-cost vehicle now to address India, China, Europe, and excess factory capacity.
Notable quotes
“these earnings results continue to to show that the business continues to decline. and in some kind of troubling ways”
“this lowcost vehicle they keep talking about. They have so much excess capacity in in their factories now because they're not selling more cars that they need a new vehicle”
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From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- tesla earnings miss
- auto industry competition
- elon musk backlash
- robotaxi plans
- tariff and fiscal policy uncertainty
Companies and tickers mentioned
- TSLA
- Tesla
- Gerber Kawasaki Wealth and Investment Management
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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